European investors leave interest rate fears behind

Frankfurt, December 21 – European investors are returning to stock markets after recent central bank decisions that many investors saw as a shock. Business surveys and an unexpected boom in the sporting goods sector boosted morale on Wednesday. The main German Dax index closed up 1.5% at 14,097.82 points. Its European counterpart EuroStoxx50 jumped 1.8% to 3,870.62 points. The most important US indexes also rose by around 1.5% each. The prospect of further sharp interest rate hikes by the world’s largest central banks had dragged stock markets down in previous days. “The Japanese central bank’s surprising decision yesterday at least leaves no lasting dent in the stock market,” said Konstantin Oldenburger, market analyst at trading house CMC Markets. “It seems to act more as a release signal. With this, the question of monetary policy for the year 2022 is finally checked.

The results of consumer surveys created a good mood. US consumer confidence unexpectedly improved at the end of the year as inflation declined. The barometer rose to 108.3 points in December against a revised 101.4 in November. This is the best value for money since April. Economists expected only 101.0 points. “Inflation expectations fell in December to their lowest level since September 2021, with the recent plunge in gasoline prices providing a major boost,” said Lynn Franco, an economics researcher at the US research group Conference Board. In addition, the consumer mood of Germans and the expectations of the DIW Institute for the economy in Germany have brightened.


Stock markets also boosted the world’s largest sportswear company, NikeNKE.N, which far exceeded expectations for its quarterly sales. The stock jumped 13.5% to $117.10. The strengthening of activities in the United States more than compensated for the weakness of the Chinese market. The news boosted the entire sector, including European giants Adidas, Puma and JDSports, which rose 9.5%. Across the Atlantic, Nike’s numbers also boosted rivals like Lululemon, Under Armor and Vans parent VFVFC.N, which rose between 1.2% and 6.1%. At the same time, announced austerity measures allowed shares of package delivery company FedEx to rise 4.7% to $172.00.

Shares of medical technology maker Philips also rose 5.7% to 13.12 euros on the Amsterdam stock exchange after upbeat reports on recalled ventilators. “We can say that the entire product meets safety standards,” said Roy Jakobs, CEO of Philips. The company had recalled 5.5 million ventilators after the foam used in some cases dissolved and released toxic fumes.


In this context, the dollar index, which reflects the course against major currencies, rose by 0.3% to 104.30 points. Prices also rose in the crude oil market. The price of Brent North Sea and US light oil WTI rose 2.4% to $81.90 and $78.02 per barrel (159 liters), respectively. “A sharper-than-expected U.S. inventory decline and U.S. plans to replenish its strategic oil reserves have supported oil prices,” said Serena Huang, principal researcher at Vortexa. “However, optimism has been tempered by downward pressure stemming from mounting headwinds in the global economy and the recent spike in Covid cases in China.”

European investors leave interest rate fears behind

Source: Reuters

Photo Symbol: Image by Paul C Lee on Pixabay

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