Strong gains in the euro markets in the wake of the Fed

European stock markets are moving with strong gains on Thursday, following it jumping indicators yesterday on Wall Street following the reassuring statements by the chairman of the Federal Reserve which helped allay concerns about more aggressive US interest rate hikes in the coming months.

The Fed on Wednesday raised interest rates by 50 basis points, the largest increase in two decades, as it stepped up its efforts to curb inflation that has climbed to a 40-year high. The central bank is simultaneously launching its balance sheet reduction, starting in June.

However, Fed Chairman Jerome Powell assured investors that the central bank would not proceed with more aggressive interest rate hikes in its next sessions, triggering an impressive rally on Wall Street that led the S&P 500 to close with a 3% jump. At the same time, the governor of the central bank appeared optimistic that the US economy will be able to withstand interest rate hikes without entering a recession.

On the board, the pan-European Stoxx 600 index is up 1.5% at 447.91 points.

The German DAX jumped 2.2% to 14,267.14 points, while the French CAC 40 gained 2.1% to 6,530.37 points. The British FTSE 100 is up 1.3% at 7,593.51 points as investors await the Bank of England decisions later today. Analysts expect the central bank to raise interest rates further as it continues to tighten its policy to tackle high inflation.

In the periphery, the Italian FTSE MIB gained 1.8%, while the Spanish IBEX 35 rose 1.5%.

Announcements of quarterly results continue in the meantime with undiminished intensity, with Shell, BMW, UniCredit, Intesa Sanpaolo, Banco BPM, Societe Generale, Credit Agricole, and Air France KLM being among the giants that announced their quarterly statements today.