Volkswacht Bodensee - China stimulus hopes help stock markets rise

Relief about a US government shutdown being avoided helped counterbalance disappointing US economic data.

Investors were keeping tabs on Beijing as officials were set to outline their plans to kickstart spending by the country's army of consumers after years of post-Covid weakness, which has been a major drag on economic growth.

The plan looks to boost income with property reforms, stabilise the stock market and encourage lenders to provide more consumption loans with reasonable limits, terms and interest rates.

"Hopes that a new consumer life raft in China will buoy up the country's prospects of recovery have helped lift sentiment slightly, but caution remains," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Officials were also looking at raising pension benefits, establishing a childcare subsidy system, and ensuring workers' rights to rest and holidays are legally protected.

The move comes after data showed consumer prices dropped into deflation in February for the first time in a year, while producer prices continued to fall.

Observers have warned that leaders have a tough job ahead of them amid US President Donald Trump's trade war.

"With China firmly in US President Donald Trump's sights, deflation concerns in China will worsen," said economists at Moody's Analytics.

"The chaos of tariffs and rising unemployment will keep consumer spending weak, denting inflation's demand drivers."

Hong Kong built on a blockbuster start to the year fuelled by a chase into Chinese tech giants, while Shanghai and Tokyo also enjoyed healthy buying.

London, Paris and Frankfurt all advanced, tracking gains in Asia.

Wall Street was mostly higher in early afternoon trading, shaking off data showing US retail sales logged smaller gains than expected in February, edging up by 0.2 percent compared to a 0.7 percent increase expected by Briefing.com.

Despite the miss, Briefing.com analyst Patrick O'Hare pointed to a more encouraging reading of control group sales that excludes certain volatile elements, which jumped 1.0 percent.

However a key survey showed a jump in prices paid by businesses, which O'Hare said "plays into some of the stagflation worries that have infiltrated the market".

Investors are concerned that the tariff war could create the conditions for stagflation: high inflation, weak demand and high unemployment.

"The economy will be a focal point throughout the week" for investors, noted O'Hare.

This week's calendar includes policy decisions from the US Federal Reserve, the Bank of Japan and the Bank of England -- and all are expected to keep interest rates on hold.

Alongside its rate decision, the Fed will release its summary of economic projections and outlook for borrowing costs this year, which comes as policymakers try to navigate the potential inflationary impacts of Trump's tariffs campaign.

Gold was trading around the $3,000 an ounce mark on Monday, after it broke the symbolic threshold for the first time on Friday owing to a rush into safe havens as traders fret over Trump's tariffs.

"A faltering US dollar and heightened risk aversion, courtesy of Trump's latest trade brinkmanship, continue to drive demand," said City Index and FOREX.com analyst Fawad Razaqzada.

- Key figures around 1630 GMT -

New York - Dow: UP 0.5 percent at 41,679.25 points

New York - S&P 500: UP 0.1 percent at 5,644.55

New York - Nasdaq Composite: DOWN 0.5 percent at 17,673.19

London - FTSE 100: UP 0.6 percent at 8,680.29 (close)

Paris - CAC 40: UP 0.6 percent at 8,073.98 (close)

Frankfurt - DAX: UP 0.7 percent at 23,154.57 (close)

Tokyo - Nikkei 225: UP 0.9 percent at 37,396.52 (close)

Hong Kong - Hang Seng Index: UP 0.8 percent at 24,145.57 (close)

Shanghai - Composite: UP 0.2 percent at 3,426.13 (close)

Euro/dollar: UP at $1.0921 from $1.0884 on Friday

Pound/dollar: UP at $1.2987 from $1.2936

Dollar/yen: DOWN at 148.55 yen from 148.62 yen

Euro/pound: DOWN at 84.10 pence from 84.14 pence

Brent North Sea Crude: UP 0.7 percent at $71.09 per barrel

West Texas Intermediate: UP 0.7 percent at $67.63 per barrel

burs-rl/sbk

R.Buehler--VB