German shares displayed a positive trend on Monday, closing 0.69% higher, buoyed by the global markets' reception of China's recent commitment to implementing economic stimulus measures. The Chinese Ministry of Finance conducted a critical press briefing over the weekend, hinting at a potential increase in the government debt ceiling along with fresh measures designed to support local governments, the property sector, and major financial institutions.
However, the much-anticipated multi-trillion-yuan fiscal package that investors were looking for was notably absent. Bank of America commented, "While the Oct 12 announcement appears to lack details, in our view, it does not rule out a decent-sized fiscal package to be rolled out in the coming weeks.
As we have cautioned earlier, the MoF is not in the capacity of announcing any budget revisions before receiving greenlights from the NPC. Near-term attention is likely shifting towards the NPC Standing Committee meeting in coming weeks." Domestically, the economic calendar for this week features key releases, including the September wholesale price figures and the ZEW economic sentiment index for October.
Furthermore, on the eurozone front, the European Central Bank is expected to unveil its latest monetary policy decision on Thursday, with analysts widely predicting a rate cut. In corporate developments, Bayer filed an application with the European Medicines Agency to extend the use of Nubeqa in conjunction with androgen deprivation therapy for patients with metastatic hormone-sensitive prostate cancer.
Despite this news, the company's stock closed 0.61% lower. Meanwhile, Merck KGaA saw a rise of 0.83% after Deutsche Bank maintained a buy rating on the stock but revised its price target down to 180 euros from the previous 188 euros. Analysts noted, "We expect the 2024 guidance to be confirmed, even though the exit rate in the Life Science segment could be slightly below the projected 7-10% (we forecast 6%).
Furthermore, the company may provide an initial look into 2025, which would be particularly interesting for the Life Science business in light of the ongoing gradual recovery of the end markets." Overall, the market's response reflects a cautious optimism as investors digest both domestic and international economic signals, awaiting further developments and data releases that could impact market sentiment..