Volkswacht Bodensee - Stock markets mostly gain on China stimulus hopes

The yuan firmed against the dollar, while oil prices built on Monday's strong advance, with optimism also on the prospect of central banks nearing the end of their rate-hiking cycle.

"Hopes that the Chinese government's stimulus measures will help drive domestic demand may be lending some support," noted Joshua Mahony, chief market analyst at Scope Markets.

He added that stocks were boosted by the likelihood of the Federal Reserve soon ending a policy of raising interest rates after, as expected, it hikes again on Wednesday.

In China, with recent data showing growth stuttering and business activity slowing in the world's second biggest economy, Beijing has come under pressure to provide support, particularly for the vast property sector.

Despite a series of announcements and minor cuts to interest rates, investors have been largely disappointed by the policy response from authorities, with very few concrete measures being unveiled.

However, top leaders have signalled a fresh push to get the post-Covid recovery back on track, particularly the troubled property sector, which accounts for a major part of China's economy.

The announcement "keeps a supportive tone, which can help provide some support for the recovery and it may provide some boost to market sentiment", said Erin Xin at HSBC.

While it was nowhere near the blockbuster spending plans seen in the past, the news gave investors a boost, with Hong Kong's stock market closing up more than four percent thanks to a rally in real estate companies and tech giants.

Among the standout performers were developers Country Garden and Sunac, which piled on at least 17 percent each.

The two firms are among several struggling under the weight of massive debts that have sent shivers through the industry.

A broadly positive earnings season so far has also lifted spirits on trading floors, while investors will be keeping a close eye on upcoming releases from Google owner Alphabet, Facebook parent Meta and Microsoft.

The European Central Bank's latest interest-rate decision is meanwhile due Thursday, with some observers predicting it too is close to bringing the curtain down on its own tightening campaign.

A key survey Tuesday showed German business sentiment has fallen for the third month in a row, as pessimism about the state of Europe's largest economy deepened.

The Ifo institute's closely watched confidence barometer, based on a survey of 9,000 companies, fell to 87.3 points in July from 88.6 points last month.

Data Monday showed eurozone economic activity shrank at its fastest rate for eight months in July owing to cuts in manufacturing.

- Key figures around 1100 GMT -

London - FTSE 100: UP 0.1 percent at 7,687.40 points

Frankfurt - DAX: UP 0.1 percent at 16,212.59

Paris - CAC 40: UP 0.2 percent at 7,441.48

EURO STOXX 50: UP 0.3 percent at 4,395.54

Tokyo - Nikkei 225: DOWN 0.1 percent at 32,682.51 (close)

Hong Kong - Hang Seng Index: UP 4.1 percent at 19,434.40 (close)

Shanghai - Composite: UP 2.1 percent at 3,231.52 (close)

New York - Dow: UP 0.5 percent at 35,411.24 (close)

Euro/dollar: DOWN at $1.1047 from $1.1067 on Monday

Pound/dollar: UP at $1.2839 from $1.2821

Euro/pound: DOWN at 86.06 pence from 86.29 pence

Dollar/yen: DOWN at 141.44 yen from 141.51 yen

Brent North Sea crude: UP 0.1 percent at $82.80 per barrel

West Texas Intermediate: UP 0.1 percent at $78.85 per barrel

M.Furrer--BTB