LONDON: European stocks jumped Thursday at the open in a global rally after the US Federal Reserve indicated it will start cutting interest rates next year, and before decisions in Britain and the eurozone.
London’s benchmark FTSE 100 index leapt 1.8 percent to 7,681.32 points, with the Bank of England widely forecast to hold its key lending rate later in the day.
In the eurozone, the Paris CAC 40 index gained 1.4 percent to 7,636 points and Frankfurt’s DAX won 1.3 percent to 16,983.05, with the European Central Bank also set to pause.
Wall Street enjoyed a record-breaking day as traders cheered a much-sought-after dovish pivot from the US central bank as inflation comes down in the world’s biggest economy.
European shares subdued as markets look to Fed decision
After more than a year of hiking, decision-makers at their last meeting of the year acknowledged that they were winning their battle against rising prices and discussed when to change tack to a looser monetary policy.
“Santa comes early as Fed pivots,” remarked CMC Markets analyst Michael Hewson.
He added: “Having seen the Federal Reserve leave rates unchanged yesterday, it’s now the turn of the Bank of England and ECB to follow suit, as well as try to navigate the messaging of when they expect to start cutting them.”
Rate decisions are also due Thursday from the Swiss National Bank and Norway’s Norges Bank.
Comments