The European STOXX 600 index closed higher on Wednesday, recording gains for the second month in a row, amid hopes of easing anti-Corona restrictions in China, and after improved inflation data in the euro zone reinforced expectations that the European Central Bank would raise interest rates at lower rates.
The European index rose 0.6 percent, to end November’s trading up 6.8 percent, its best monthly performance since July.
China-influenced luxury stocks were among the biggest supporters of the STOXX 600 on Wednesday, followed by autos and commodities stocks.
And the two major cities of Guangzhou and Chongqing in China announced the easing of anti-Corona virus restrictions, on Wednesday, after a series of protests against the most severe restrictions of their kind in the world. But with record numbers of infections across China, the prospect of a major shift in the “zero Covid” policy seems slim.
Meanwhile, data showed that consumer prices in the eurozone rose 10 percent in November, which is much lower than expectations of a 10.4 percent rise after an increase of 10.6 percent in October, prompting dealers to raise their bets on the European Central Bank’s increase. Interest rate of 50 basis points in December.
The benchmark STOXX 600 index rose nearly 15 percent from its lowest level at the end of September trading, supported by hopes that the Federal Reserve (the US central bank) will turn to raising interest rates at lower rates amid signs of an improvement in the US economy.
With the energy crisis continuing in Europe, Citigroup expects the eurozone and Britain to slip into recession by the end of this year and to contract by 0.4 percent and 1.5 percent, respectively, next year.
(Archyde.com)