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European shares reversed early losses to hit a five-week high on Wednesday after a smaller-than-expected interest rate hike by the Bank of Canada (BoC) ignited hopes that major central banks could temper rate-hike stance.

The pan-European STOXX 600 index ended up 0.7% at its strongest level since September 20.

Germany’s blue-chip DAX jumped 1.1%, France’s CAC 40 rose 0.4% and Italy’s FTSE MIB climbed 0.5%, all the three hitting a six-week highs.

Global stock markets rose after the BoC delivered a smaller-than-expected interest rate hike and said it was getting closer to the point where rate increases could end, as it forecast the economy could possibly slip into a slight recession.

“With Bank of Canada raising lesser than expected, you’re definitely seeing a good switching away from earnings,” said Steve Sosnick, chief strategist at Interactive Brokers.

“If the Bank of Canada is not raising as much as expected, maybe that sets the tone for other central banks.”

All eyes are on the European Central Bank’s policy meeting on Thursday where policymakers are widely expected to push ahead with another 75 bps rate increase to tame inflation.

European markets were under pressure for most part of the day as disappointing earnings from Wall Street’s tech giants and a gloomy economic outlook overshadowed strong profits at some of Europe’s largest banks.

Europe’s technology index closed marginally lower after its U.S. peers were dragged down by weak results from Microsoft Corp and Alphabet Inc.

Shares of Germany’s Deutsche Bank rose 1.2%, while Britain’s Barclays and Spain’s Santander slipped as they warned of growing risks even as they posted stronger-than-expected profits. The European banking index slipped 0.3%.

Italy’s UniCredit rose 4.3% after the bank raised its 2022 profit goal.

“Impressive performance from the likes of UBS, Deutsche Bank, and UniCredit serve to highlight the benefits of higher interest rates and sizeable market movements,” said Joshua Mahony, senior market analyst at online trading platform IG.

“Nonetheless, we are likely to see some hesitation, with the economic implications of rising interest rates yet to be felt. That goldilocks situation of higher margins and economic health could soon come to an end given how the data has been shaping up.”

Meanwhile, London’s blue-chip FTSE 100 rose 0.6% as Britain’s new prime minister, Rishi Sunak, delayed the announcement of a keenly awaited plan for repairing the country’s public finances until Nov. 17.

Among other single stocks, Heineken NV fell 5.4% after the world’s second-largest brewery said it has seen signs of slowdown in demand in some European markets.

ASM International tumbled 7.8%, after the chip supplier said it expected new U.S. export restrictions to weigh heavily on its sales in China.

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