Jan 4, 2024: European stock markets saw an upward trend on Thursday, bouncing back from recent declines as investors processed regional inflation figures and speculated about potential central bank actions.
At 03:10 ET (08:10 GMT), Germany’s DAX index surged 0.3%, France’s CAC 40 climbed 0.3%, and the U.K.’s FTSE 100 advanced by 0.4%.
The market sentiment had shifted following a pullback on Wednesday, erasing some of the gains achieved late last year that had driven the regional indices toward two-year highs. Investors had begun to reconsider their expectations for a soft landing in the U.S. and swift rate cuts by the Federal Reserve.
However, recent developments have altered this sentiment. The Fed’s December meeting minutes, released late Wednesday, didn’t offer clear insights into the timing of the first rate cut but did highlight a growing belief in manageable inflation. The minutes expressed concerns about the potential risks posed by “overly restrictive” monetary policies on the economy.
Moreover, in Europe, French inflation data released earlier on Thursday indicated a softer-than-expected trend, with consumer prices rising by 0.1% in December, resulting in an annual increase of merely 3.7%.