LONDON: European stock markets rose Friday at the open, mirroring Asia in a busy week for global interest rates after the Federal Reserve pivoted to signal it would cut next year.
London’s benchmark FTSE 100 index won 0.1 percent to 7,657.17 points, one day after the Bank of England (BoE) paused its key interest rate but warned it will remain high to tackle inflation in contrast with the Fed.
In the eurozone on Friday, the Paris CAC 40 index gained 0.4 percent to 7,603.06 points and Frankfurt’s DAX added 0.5 percent to 16,828.66, one day after the European Central Bank (ECB) froze rates.
The guardian of the euro joined the BoE in warning that its fight against inflation was not over, dousing hopes of early rate cuts in 2024.
“The ECB and the BoE refused to join the Fed-thrown pivot party,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“Both (ECB president) Christine Lagarde and (BoE governor) Andrew Bailey declined to discuss cutting interest rates judging a policy loosening too early as the inflation threat looms,” she added, noting also that Norway had sprang a surprise rate hike.
European stocks jump in Fed-driven global rally
“As a result, the rally in global stock and bond markets slowed.”
Equities had spiked after the Fed on Wednesday delivered a much-sought-after dovish pivot as inflation comes down in the world’s biggest economy.
After more than a year of hiking, Fed policymakers acknowledged that they were winning their battle against rising prices and discussed when to change tack to a looser monetary policy.
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