2023-12-19 18:48:00
(Archyde.com) – European stocks rose on Tuesday, with government bond yields falling after comments from European Central Bank officials and data confirming a slowdown in inflation in the region.
The European index closed 0.4 percent higher, coinciding with the rise of the Standard & Poor’s 500 index in New York near its highest levels ever, with investors expecting that major central banks, including the Federal Reserve and the European Central Bank, will begin reducing interest rates next year.
The index of travel and entertainment companies rose 1.8 percent, topping sector gains in Europe, followed by the mining and financial services sector indexes.
The data confirmed that euro zone inflation slowed sharply to 2.4 percent in November year-on-year, although many economists expect price pressures to rise again in the coming months.
“With inflation now near the 2 percent target, the ECB’s focus will now almost certainly shift to keeping the eurozone economy alive, an economy that has been teetering on the brink of recession in 2023,” said Michael Field, European market strategist at Morningstar.
Francois Villeroy de Gallo, a member of the European Central Bank’s Governing Council, said that interest rates are expected to be cut sometime in 2024, reiterating the need for inflation to fall to two percent by 2025 at the latest.
Driven by optimism about lowering interest rates, the STOXX 600 index is heading for a second month of gains in December, rising 12.4 percent for the year.
UBS shares rose 3.4 percent after investment company Cevian Capital announced a 1.3 percent stake in the bank.
Covestro shares increased 1.4 percent after a report stated that Abu Dhabi National Oil Company (ADNOC) is preparing to raise its offer to buy the German chemical manufacturer.
However, Super Dry shares in Britain fell 17.5 percent to a record level after the clothing retailer warned of a decline in annual profits.
(Prepared by Rehab Alaa for the Arabic Bulletin)
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