dpa
(TNS) European stocks rate cuts
London — Optimism over interest rate cuts had traders in a happy mood on Friday as the major European stock markets finished solidly to the upside, extending recent gains.
Federal Reserve Governor Christopher Waller told CNBC on Thursday that the US central bank could lower interest rates multiple times this year if inflation continues to ease as expected.
Closer to home, European Central Bank (ECB) Governing Council member Yannis Stournaras said on Thursday that “policy should continue with a series of rate cuts at the next meetings.”
Traders expect a 100-basis point cut from the ECB this year.
Germany’s DAX rallied 248.00 points or 1.20% to finish at 20,903.39, while London’s FTSE spiked 113.32 points or 1.35% to close at 8,505.22 and the CAC 40 in France gained 75.01 points or 0.98% to end at 7,709.75.
In Germany, Siemens Energy surged 3.06%, while Heidelberg Materials spiked 3.02%, Daimler Truck Holding jumped 2.00%, Deutsche Post climbed 1.98%, Deutsche Bank advanced 1.74%, Infineon Technologies improved 1.72%, Merck slumped 1.40%, BASF added 0.68%, Deutsche Borse and Volkswagen both rose 0.52% and Deutsche Telekom was unchanged.
In London, Entain skyrocketed 6.29%, while Smiths Group surged 5.50%, Prudential accelerated 4.93%, Scottish Mortgage rallied 2.45%, British American Tobacco strengthened 1.75%, Rolls-Royce Holdings improved 1.59%, EasyJet gained 1.31%, Haleon collected 0.97%, Rightmove rose 0.49%, and Vodafone Group perked 0.12%.
European stocks rate cuts
In France, Carrefour plummeted 4.95%, while Atos tanked 4.76%, Veolia Environment soared 2.24%, Engie rallied 1.55%, Vivendi surrendered 1.01%, Danone advanced 0.87%, Crédit Agricole and Sanofi both rose 0.32%, Société Générale perked 0.07% and BNP Paribas was up 0.05%.
In economic news, British retail sales declined unexpectedly in December on falling food store sales, data from the Office for National Statistics showed Friday.
Retail sales volume decreased 0.3% on a monthly basis in December, in contrast to the revised 0.1% increase in November and confounding expectations for an increase of 0.4%.
Eurozone inflation rose to a five-month high in December, as initially estimated, final data from Eurostat showed on Friday.
The harmonized index of consumer prices climbed 2.4% from a year ago, following a 2.2% gain in November. The rate was the fastest since last July, when prices grew 2.6%.
Core inflation that excludes prices of energy, food, alcohol and tobacco held steady at 2.7% in December.
The euro area current account surplus fell to a three-month low in November, the European Central Bank said Friday.
The current account surplus decreased to €27 billion ($27.7 billion) from €30 billion in October. This was the lowest since August, when the surplus was €23.5 billion.
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Notes from APS Radio News
Some sessions ago, at European markets, stocks closed lower over concerns that interest rates were too high.
Starting in March 2020 and extending to the Summer of 2022, the Federal Reserve, the US central bank, implemented a massive program of monetary expansion.
During that period, the central bank added about $4.6 trillion to its holdings.
A number of other banks, including the Bank of Japan and the ECB embarked on a similar course during that period, adding the equivalent of trillions of dollars between those banks.
According to a number of economists, the combination of rapid and massive infusions of currency & shortages of goods and services brought about by lockdowns and sanctions imposed against Russia led to higher rates of inflation.
Another source of inflation has been price gouging.
