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Just as the European stock market is showing a great deal of health, there has been a rub-off on those in the US.
The European stock markets and the counterpart in the US are seeing a notable rebound as the monetary policies from the European Central Bank (ECB) and the Federal Reserve are shaping investors’ sentiments across the board.
Despite the raging inflationary trends in the European Union, the Central Bank has decided to keep the interest rates unchanged. This gives a very massive boost to investors as borrowing funds to enhance businesses comes at a little or no major strain. Based on this, investors rallied around and stacked up stocks that led to the upliftment of the region’s major averages.
The STOXX Europe 600 (INDEXSTOXX: SXXP) inched a 0.23% gain to 463.21, the DAX PERFORMANCE-INDEX (INDEXDB: DAX) added 51.49 points atop a 0.34% growth to 15,151.05. The Financial Times Stock Exchange 100 Index, FTSE 100 Index (INDEXFTSE: UKX) grew 0.30% to 7,538.83 and the CAC 40 (INDEXEURO: PX1) is up 0.2% to 6,965.60.
Despite the decisions to keep interest rates at zero, the ECB is not oblivious of the fact that inflation is likely to remain in the region for quite some time. “Inflation is likely to remain elevated for longer than previously expected, but to decline in the course of this year,” said ECB President Christine Lagarde.
“Compared with our expectations in December, risks to the inflation outlook are tilted to the upside, particularly in the near term. If price pressures feed through into higher than anticipated wage rises or the economy returns more quickly to full capacity, inflation could turn out to be higher,” Lagarde also said.
Taking a completely differing position from the ECB, the Bank of England (BoE) hiked its interest rates in a subsequent manner as has never been seen since 2004. While these authorities have different stances about monetary guidance, investors in each region seem to be having a good day across the board.
European Stock Market Casts a Shadow Over US Markets
Just as the European stock market is showing a great deal of health, there has been a rub-off on those in the US with the S&P 500 Index (INDEXSP: .INX) ending its last trading session up 0.52% to 4,500.53. With the 1.58% growth in the Nasdaq Composite (INDEXNASDAQ: .IXIC), both indices ended the previous week on a very bullish note, the first time this year.
The release of performance earnings from Wall Street firms helped in reversing some of the top losses accrued in the previous week. Despite the impressive uplifts that indices like the S&P 500 and the Nasdaq Composite recorded, the Dow Jones Industrial Average (INDEXDJX: .DJI) was unable to par off its losses as it closed at 0.061% to 35,089.74.
As the Chinese market resumed from the Lunar New Year holidays, shares were mixed across the board, and amongst the major market gainers is the Shenzhen Component Index, SZSE Component Index (SHE: 399001).