Address

Precise Investors

Monday, January 30, 2023
Stocks & Shares

Europe’s STOXX 600 logs its second straight month of gains

European index

The pan-European index rose 0.6% to end November with a 6.8% gain, its best monthly performance since July

The STOXX 600 index closed higher on Wednesday and registered its second straight month of gains on hopes of easing COVID curbs in China and after cooler euro zone inflation data bolstered case for smaller rate hikes by the European Central Bank.

The pan-European index rose 0.6% to end November with a 6.8% gain, its best monthly performance since July.

China-exposed luxury stocks were among the biggest boosts to the STOXX 600 on Wednesday, followed by auto and commodity stocks.

The giant Chinese cities of Guangzhou and Chongqing announced an easing of COVID curbs on Wednesday after a string of protests against the world’s toughest coronavirus restrictions. But with record numbers of cases nationwide, there seems little prospect of a major U-turn in ‘zero-COVID’ policy.

Optimism about China reopening is really starting to filter through, said Giles Coghlan, chief market analyst at HYCM.

Meanwhile, data showed consumer prices in the euro zone grew 10% in November, well below expectations for 10.4% and after a 10.6% increase in October, prompting traders to raise their bets to 57% for a 50 basis point rate hike by the ECB in December.

The report came amid mixed signals from policymakers recently about the pace and path of future increase in borrowing costs.

Euro zone inflation is following that of the U.S. in making some tentative declines from peak levels. It would be foolish to be complacent about the risks of inflation taking a new leg higher, said David Goebel, associate director of investment strategy, Evelyn Partners.

Nonetheless, these latest readings will give consumers and investors some hope that the worst of this inflationary episode could be in the rear-view mirror, Goebel said.

The benchmark STOXX 600 has climbed nearly 15% from its September closing lows on hopes that the Federal Reserve will shift to smaller interest rate hike amid signs of cooling U.S. economy.

With the energy crisis seen persisting in Europe, Citigroup expects the euro zone and the UK to slip into recession by the end of this year and forecast contractions of 0.4% and 1.5%, respectively, for the coming year.

Important:

The articles are for information purposes only and Precise Investors shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.

Precise Investors does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

Leave a Reply