European shares rebounded on Friday, recovering after falling over the previous two sessions, with investors focused on next week’s European Central Bank policy meeting and political turmoil in Italy, and as fears that the US Federal Reserve is heading for a 100-point rate hike, after some hawkish policymakers announced They prefer the next increase to be at 75 basis points.
And the (European Stoxx 600) index rose 0.1% by 7.13 GMT, after falling 2.6% in the past two sessions, as investors were worried that sharp US inflation would push the Federal Reserve to raise interest rates more than expected, by 100 points. Basis, later in the month.
But last night’s statement by two of the board’s more hawkish policy makers that they favor another 75 basis point increase has allayed fears, as aggressive policy tightening by major central banks has investors worried about a possible recession.
Investors are now looking forward to next week’s European Central Bank meeting, where it was indicated that it will raise rates by 25 basis points, the first in more than a decade.
The European Central Bank has lagged behind most of its peers in raising interest rates, but with inflation at record levels and expected to be exacerbated by an energy row with Russia, markets are looking for hints about the scale of future hikes.
The Italian stock index settled at 0.1%, after falling 3.4% to its lowest level since November 2020 on Thursday, when Prime Minister Mario Draghi resigned after the Five Star Movement, a member of the coalition, refused to support him in a vote of confidence in his plan to combat high prices.
President Sergio Mattarella urged him to rethink.
Some lower profits affected the (Stoxx 600) index, with the shares of Richemont Group for Luxury Goods, Rio Tinto Mining and Dutch Tom Tom Shipping dropping between 2% and 3.7%.
Meanwhile, the healthcare and technology sectors were among the biggest proponents of the index.