Stocks jumped on China’s tax cut plans

Stocks rallied across Europe and Asia and U.S. futures jumped on signs China is stepping up efforts to combat an economic slowdown. The pound edged up as U.K. politicians prepared for a crunch vote on Brexit.

The Stoxx Europe 600 Index climbed for the fifth day from six, tracking a broad-based advance across Asia where Japan’s market reopened after a holiday. Shares in Hong Kong and Shanghai were among the biggest gainers after senior Chinese economic policy officials vowed tax cuts to boost growth, while lending data from the country suggested December estimates may be exceeded. The dollar was steady. Oil recouped some of Monday’s losses, trading above $51 a barrel in New York.

The potential stimulus in China and warm welcome it has received from markets reflects the delicate balance underpinning 2019’s risk asset rebound: The same weak macro data that prompted a sell-off at the end of last year has the potential to spur looser monetary policies and therefore ignite a rally.

Futures on the S&P 500 Index advanced 0.6 percent as of 8:05 a.m. London time, to the highest in more than a month on the largest gain in a week. The Stoxx Europe 600 Index advanced 0.8 percent to the highest in almost six weeks on the biggest gain in a week. The U.K.’s FTSE 100 Index advanced 0.7 percent, the largest gain in a week. Germany’s DAX Index climbed 1 percent to the highest in almost six weeks on the biggest increase in more than a week. The MSCI Asia Pacific Index jumped 1 percent to the highest in almost six weeks. The MSCI Emerging Market Index advanced 1.1 percent to the highest in six weeks.