European stocks closed higher on Thursday with several key indices hitting multi-month highs, as investors cheered Fed Chair Jerome Powell’s comments that interest rate hikes will be smaller from as early as December.
Markets also reacted positively to reports that China is likely to soften its stance on Covid-related curbs.
In his speech at the Brookings Institution event on Wednesday, Powell said that time for moderating the pace of interest rate increases may come as soon as at the December meeting.
“Given our progress in tightening policy, the timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level,” he said.
The pan European Stoxx 600 climbed 0.89%. Germany’s DAX gained 0.69% and France’s CAC 40 advanced 0.23%, while the U.K.’s FTSE 100 ended 0.19% down. Switzerland’s SMI surged 0.99%.
Among other markets in Europe, Belgium, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Russia, Sweden and Turkiye closed higher.
Austria ended weak, while Czech Republic and Spain settled flat.
In the UK market, Ocado Group climbed 6.8% after launching a new supplier insights product to help drive sales and increase revenue.
ICP surged 6.25% and Schrodders rallied 4.75%. Prudential, Scottish Mortgage, RS Group, Haleon, Kingfisher, Ashtead Group, Halma, United Utilities, Dechra Pharmaceuticals, Segro and Barratt Developments gained 2 to 4%.
Pearson, Rolls-Royce Holdings, Standard Chartered, Anglo American Plc, Shell, 3i Group, Barclays, Natwest Group, Lloyds Banking Group, BP and Melrose Industries ended sharply lower.
HSBC Holdings drifted lower after it agreed to sell its business in Canada to Royal Bank of Canada.
In the German market, HelloFresh rallied more than 6%. Zalando surged 4% and Sartorius gained about 3.75%.
Infineon Technologies, Puma, Fresenius Medical Care, Merck, SAP, Adidas, Siemens, RWE and Deutsche Telekom gained 1.3 to 3%.
Covestro, Deutsche Bank, BASF, Porsche Automobil, BMW and Volkswagen ended with sharp to moderate losses.
In Paris, Capgemini, Dassault Systemes, Vivendi, Teleperformance, Saint Gobain, Eurofins Scientific, Legrand and STMicroElectronics gained 2 to 4.3%.
Valneva SE shares gained more than 8% after Pfizer Inc. and the French biotech company reported six-month antibody persistence data for Lyme disease vaccine candidate VLA15 in both children and adults.
Societe Generale and LVMH both ended more than 2% down. ArcelorMittal and TotalEnergies also closed notably lower.
In economic news, UK house prices posted its biggest decline since June 2020 reflecting the loss of momentum in the property market amid the stretched housing affordability, data published from the Nationwide Building Society showed.
House prices dropped by a more-than-expected 1.4% on a monthly basis in November, after easing 0.9% in October. Prices were forecast to fall 0.6%. This was the largest decrease in property prices since June 2020.
Data from Eurostat showed the Eurozone unemployment came in at 6.5% in October, down from 6.6% in September. In the same month last year, the jobless rate stood at 7.3%.
Economists had forecast the jobless rate to remain unchanged at 6.6% in October.
Eurozone manufacturing activity continued its downward trend in November but the rates of decline in output and new orders were less aggressive than seen a month ago, final data from S&P Global showed on Thursday.
The final manufacturing Purchasing Managers’ Index rose to a two-month high of 47.1 in November from 46.4 in the previous month. The flash reading was 47.3.
The UK manufacturing activity shrank again in November reflecting lower output, weaker demand and reduced employment, final data from S&P Global showed on Thursday.
The Chartered Institute of Procurement & Supply factory Purchasing Managers’ Index edged up to 46.5 in November from 46.2 in October.
Switzerland’s consumer prices rose 3% year-on-year in November, the same as seen in October, data from the Federal Statistical Office showed.
Switzerland’s retail sales declined in October, falling by 2.5% year-on-year, data from the Federal Statistical Office showed.
Market Analysis
European Stocks Close Higher On Hopes Of Smaller Rate Hikes By Fed
2022-12-01 17:56:30
