The interest rate signal given by Christine Lagarde finally overcame the new inflation shock in the US, with European indices concluding their trades with strong gains.
In particular, the pan-European Stoxx 600 closed with a rise of 1.74% to 427.59 points, receiving a boost from the 3.6% jump in the automotive sector while the defense sector fell by 1.2%.
The high capitalization on the Stoxx 50 moved even better, with a rally of 2.6% at 3,646 points.
In the rest of the European charts, the German DAX finished with strong gains of 2.17% at 13,828 points, the French CAC 40 rallied 2.5% closing at 6,286 points, while the British FTSE 100 followed closely with + 1.4% at 7,347 units.
The picture was similar in the region, where in Italy the FTSE MIB had the performance of the day with + 2.84% at 23,724 points, while in Spain the IBEX 35 strengthened by 2.13%, finishing at 8,312 points.
In the news that seemed to determine the pace of transactions, the President of the ECB Christine Lagarde, showed today that the first increase in bank interest rates in more than 10 years may come in July.
The ECB’s willingness to take action against persistently high inflation was positively assessed by investors, at a time when new data on the course of prices in the US brought new turmoil.
In particular, inflation in the world’s largest economy moved faster than expected in April, as the consumer price index rose 0.3% on a monthly basis and 8.3% on an annual basis, while the market expected +0.2 % and + 8.1% respectively.
It is characteristic that when the data were announced, the indices plunged sharply, with the Stoxx 600 temporarily passing even in negative territory, however, in the course of time, the calm returned and the markets finally closed at basically high during the day.
In any case, the turmoil should not be considered over. For example, Fidelity International analyst Salman Ahmed, speaking to CNBC today, pointed out that his team has an “underweight” signal for the shares in general in the world, but with those of the USA in a better position than the European ones.
“We believe that Europe is at the heart of the storm,” he said, adding that disruptions in gas flows from Russia were likely to worsen.
Source: Capital
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