European Markets Close On Strong Note

European markets ended on a firm note on Friday as comments from Fed policymakers that the central bank will not raise rates until it sees inflation above target for a long time helped ease worries on the rate front and prompted investors to pick up stocks.

Some encouraging earnings reports, continued optimism about global economic recovery thanks to gradual reopening of businesses in several places in the region too aided sentiment.

The pan European Stoxx 600 climbed 1.19%. The U.K.’s FTSE 100 gained 1.15%, France’s CAC 40 surged up 1.54% and Germany’s DAX advanced 1.43%, while Switzerland’s SMI ended 0.79% up.

Among other markets in Europe, Austria, Belgium, Czech Republic, Finland, Greece, Ireland, Netherlands, Portugal, Spain and Sweden ended with strong gains.

Denmark, Iceland, Norway and Poland closed modestly higher, while Russia ended flat.

Travel-related stocks moved higher on reports pandemic restrictions in, the U.K., Germany and in a few other countries could ease further in the coming days.

In the UK market, Burberry Group, Whitbread, Sage Group, BAE Systems, IHG, Melrose Industries, Rolls-Royce Holdings, Standard Life and M&G gained 3 to 4.5%.

Royal Dutch Shell, Scottish Mortgage, Associated British Foods, JD Sports Fashion, Lloyds Banking Group, Kingfisher, Spirax-Sacro Engineering, Prudential and IAG also ended sharply higher.

Rio Tinto, BHP Group, Antofagasta and Evraz declined by 1 to 3%.

French stocks Safran, Unibail Rodamco, Airbus Group, Air France-KLM, Technip, Renault and Faurecia gained 3 to 4%. Schneider Electric, Accor, Total, Sodexo, Engie, Vinci, Thales and LVMH also rose sharply.

In the German market, MTU Aero Engines gained about 4%. Lufthansa and Infineon Technologies gained more than 3.5% and 3.2%, respectively. Siemens, Volkswagen, Continental, Daimler and BMW rallied 2 to 3%.

The minutes of the latest rate-setting session of the European Central Bank showed policymakers are looking forward to review the Eurozone economic and inflation outlook, and the duration to continue stimulus in the monetary policy session in June.

Net asset purchases has hit the highest monthly purchase volume since July 2020, reflecting a marked increase versus average purchases in the first two months of this year, the ECB said. The sharp increase was despite the policy decision being taken mid-March.

“Members recalled that the monetary policy meeting in June would provide the next opportunity to conduct a thorough assessment of financing conditions and the inflation outlook,” the minutes of the April 21-22 meeting, which the ECB calls “the account” showed.

ECB policymakers noted that the progress with vaccination campaigns and the envisaged gradual relaxation of containment measures underpin the expectation of a firm rebound in economic activity in the course of this year.

Federal Reserve Governor Christopher Waller’s comments on Thursday that increases in prices above the central bank’s 2% goal should be temporary and the Fed will not raise rates until it sees inflation above target for a long time, helped ease fears about a rate hike.

Fed policymakers Lael Brainard and Richard Clarida made similar comments on Tuesday and Wednesday, respectively.