European stocks closed higher on Thursday as investors incorporated the monetary policy decisions of the world’s largest central banks, mainly the Federal Reserve, the Bank of England and the European Central Bank.
The pan-European index Stoxx 600 closed with an increase of 1.23%, at 476.56 points, with the energy sector (oil and gas) recording a profit of 2.8%, leader of profits, in one day with all sectors and major stock exchanges in positive territory . The other pan-European index, Eurostoxx 50, with the “heavy papers” of the eurozone, gained 1.01%, to 4,201.87 points.
The German DAX recorded an increase of 1.03%, to 15,636.40 points, with the French CAC 40 to increase by 1.12%, to 7,005.07, while the British FTSE 100 recorded gains of 1.29%, at 7,263 points.
On the periphery, the Italian FTSE MIB strengthened by 0.44%, to 26,782.44 points, while the Spanish IBEX 35 gained 1.27%, to 8,380.
The central bank of the United Kingdom, BoE, has raised its key interest rate for the first time since the start of the Covid-19 pandemic, despite concerns about the rapid spread of the Omicron mutation in the UK.
The BoE’s key interest rate rose to 0.25% from a record low of 0.1% as inflationary pressures intensified as macroeconomic data met the criteria set by members of the Bank’s monetary policy committee for a rate hike. the effect of the mutation on economic activity remains unclear.
The European Central Bank is also launching a further slowdown in bond markets in the emergency pandemic program (PEPP) as it faces a strong rally in inflation in recent months. The central bank also officially announced that at the end of March 2022 it will stop net purchases under PEPP.
In the first quarter of 2022, the BoD expects to conduct net purchases under the PEPP at a significantly slower pace than in the previous quarter, the ECB said in a statement following its monetary policy meeting in 2021. net markets under the PEPP program at the end of March 2022 “, he adds.
Investors around the world have been incorporating the US Federal Reserve’s “signal” in their strategy since last night about an aggressive decline in bond markets and an increase in interest rates, probably three times in 2022.
The Fed will begin to slow its buying rate almost from the beginning of the pandemic (quantitative easing), buying just $ 60 billion in January, up from $ 90 billion in December.
The decision is related to strong persistent inflation, which on an annual basis reached 6.8% in the US in November, the highest since 1982.
In terms of individual shares, the British retail group THG led, with gains of 8.1%, the Stoxx 600 while at the other end of the index, the share of EDF sank by 15.5%, after the discovery of defects in nuclear power plants of the company in France, which led the French energy giant to cut its earnings forecast for the whole year.