European markets experienced a significant upswing on Thursday, fuelled by investor optimism following the US Federal Reserve’s indication of potential interest rate cuts next year.
The pan-European Stoxx 600 index closed up by 0.9%, reaching its highest level since January 2022.
The surge was led by a 3% jump in mining stocks, with nearly all sectors and major bourses closing in positive territory. However, insurance stocks deviated from this trend, dropping by 1.8%.
This market response came after the Federal Open Market Committee’s decision on Wednesday to keep interest rates steady in the range of 5.25% to 5.5%, aligning with Wall Street’s expectations. The Fed’s projection of at least three rate cuts in the coming year further bolstered the positive market sentiment.
In the US, the Dow Jones Industrial Average reached a new record, partly due to strong economic data. Additionally, Hong Kong stocks led gains in the Asia-Pacific equity markets.
European investors are now turning their attention to the monetary policy decisions of the European Central Bank and the Bank of England, both of which decided to maintain their current interest rates on Thursday.
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