European stocks close higher as traders monitor coronavirus

Key Points
  • China's central bank announced fresh policy measures to shield its economy from the fallout of the coronavirus.
  • The pan-European Stoxx 600 closed up more than 0.3% after hitting a record high earlier in the session.
  • U.S. markets were closed Monday for the President’s Day federal holiday.

European stocks closed higher Monday after China's central bank cut interest rates in a bid to aid its economy amid the coronavirus outbreak.

European markets

The pan-European Stoxx 600 closed provisionally up more than 0.3% after hitting a record high earlier in the session. Autos climbed 1.2% to lead gains while tech stocks bucked the risk-on trend to fall 0.3%.

The People's Bank of China, or PBOC, announced on Monday that it would provide medium-term funding of 200 billion yuan ($29 billion) to commercial lenders and cut its main interest rate by 10 basis points to 3.15%.

The move is intended to shield the economy from the fallout of the coronavirus, which has now infected over 70,000 people and killed 1,770, according to China's National Health Commission.

Shares in mainland China led upward momentum for Asian markets overnight, with the Shanghai composite index up over 2% and the Shenzhen composite adding 3%.

U.S. markets were closed Monday for the President's Day federal holiday, having closed little changed on Friday to finish out a positive week on Wall Street.

Stocks on the move

Corporate earnings remain in focus. French auto parts maker Faurecia said market conditions would be tough in 2020 despite reporting a rise in full-year net profit and sales on Monday morning.

Faurecia stock climbed 6%, while Italy's Interpump Group led individual stock gains with a 7.6 % rise. Compatriot lender Ubi Banca added 5.5% after announcing plans to improve profitability and cut 10% of staff by 2022.

At the other end of the European index, Tullow Oil stock fell nearly 3% after an unsuccessful offshore exploration in Peru was abandoned.

Semiconductor stocks tumbled, with STMicro, ASMI, AMS and Dialog Semiconductor all falling more than 2.5%. It comes after Reuters reported Monday afternoon, citing sources, that proposed manufacturing equipment limits could impact the semiconductor industry beyond China.