Stock markets slide, oil jumps as China cuts rates

Major stock markets slid on Monday on profit-taking and oil prices jumped as traders weighed fresh interest-rate cuts from China's central bank aimed at reigniting the world's second-biggest economy.

Another record session on Friday on Wall Street crowned a sixth weekly gain in a row, but failed to carry over into Monday and inspire a similar rally elsewhere.

"The weaker -- but not weak -- disposition is flowing from a posture of strength in the major indices that has invited some selling interest after some big gains," Briefing.com analyst Patrick O'Hare said in a note to clients.

Investors are also biding time as they await the next batch of corporate earnings, with Google's parent company Alphabet to report its third-quarter figures on Tuesday and IBM and Tesla to follow on Wednesday.

Boeing, Coca-Cola, General Motors and L'Oreal also report their earnings this week.

Oil prices, which tumbled more than eight percent last week, also drew support from Middle East unrest, as well as from hopes of increased demand from China -- the world's top importer of crude.

"The idea is that the move (on Chinese rates) will encourage lending and spending and help mend the ailing property market," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

"But there are still expectations that further fiscal stimulus will be needed."

China's central bank on Monday said it had slashed two key interest rates to all-time lows as part of an official drive to revive spending and achieve a five-percent annual economic growth target.

The move comes after figures last week showed China's economy expanded at its slowest quarterly pace since the start of 2023, but still better than forecast.

"This comes as probabilities shift towards a slowdown in monetary policy easing from the Federal Reserve, and the possibility of a quicker pace of rate cuts from both the European Central Bank and the Bank of England," he added.