Stock indices closed higher on further stimulus by China's central bank. The People's Bank of China (PBOC) announced on Sunday that it lowered the amount of cash that banks must hold as reserves. The government hopes to spur bank lending and combat slowing growth. The central bank cut the reserve requirement ratio for all banks by 100 basis points to 18.5%. The cut is effective from April 20. The reserve requirement ratio will be lowered by another percentage point for rural banks, two additional percentage points for the central bank's Agricultural Development Bank, and a further 0.5% for banks lending to agriculture and small businesses.
Concerns over Greece's debt problems are still in focus. Greece is still running out of cash, and it needs a new tranche of loans. The Greek government hopes to unblock a new tranche of loans at the Eurogroup meeting on April 24. Germany's Finance Minister Wolfgang Schäuble said last week that he did not expect that a solution will be found on April 24.
The European Central Bank Governing Council Member Ewald Nowotny said in an interview to CNBC on Monday that he does not expect an agreement between Greece and its creditors will be signed this week. He added that the Greek exit from the Eurozone would not have the same impact on the Eurozone as it would have had two years ago.
The Bundesbank released its monthly report on Monday. The central bank said that strong private consumption will be a driver of the economic growth in Germany. "The exceptionally good environment for consumption, based on the solid state of the labour market and strong growth in real wages point to this development continuing for some time," the Bundesbank noted.
Indexes on the close:
Name Price Change Change %
FTSE 100 7,052.13 57.50 0.82 %
DAX 11,891.91 203.21 1.74 %
CAC 40 5,187.59 44.33 0.86 %