EUROPE Markets extends gain after Powell speech

1 Dec 2022 , 06:29 PM

European stock markets were trading firmly higher on Thursday, 01 December 2022, as risk sentiments strengthened on tracking Wall Streets gains overnight after U.S. Federal Reserve Chair Jerome Powell struck a more dovish tone than the market expected, while the easing of COVID-19 curbs in two major Chinese cities further spurred risk appetite. Adding to risk sentiments was optimism that Beijing will roll out more pro-growth measures to arrest a slowdown in growth. However, market gains after data showed that German retail sales slumped 2.8% in October, an annual drop of 5%, setting an ominous tone for a fourth quarter in which Europes largest economy is widely expected to shrink. At 12:05 GMT, the pan European Stoxx 600 index added 0.86% to 443.83. The U.K.s FTSE 100 index added 0.1% to 7,580.97. Frances CAC 40 index rose 0.15% to 6,748.45. Germanys DAX index gained 0.68% to 14,494.33. Switzerlands Swiss Market index inclined 1.14% to 11,254.55. Investors cheered as the US Federal Reserve Chair Jerome Powell indicated a slowdown in interest rate increases as soon as December. Powell suggested that the US central bank is preparing to raise its benchmark rate by 0.5%age points when its monetary policy committee gathers in December, after a string of 0.75-point increases. Powells remarks followed government data released earlier on Wednesday that showed a decline in job openings in October, indicating that this years monetary tightening has slowed down the labour market. Adding to the upbeat sentiment were the easing of restrictions in the Chinese cities of Guangzhou and Chongqing following a string of protests. Chongwing will now allow close contacts of people with COVID-19 to quarantine at home, while Guangzhou lifted lockdowns in some parts of the city. The policy path for now is towards looser Covid-19 restriction and a shift from the dynamic zero strategy that the government had held onto in the past. ECONOMIC NEWS: Unemployment in the eurozone has dropped to a record low, at 6.5% in October, the EUs Eurostat statistics office said Thursday. The seasonally adjusted unemployment rate was markedly less than the 7.3% recorded a year ago. Eurostat estimated that, for the entire 27-nation European Union, 12.95 million adults were unemployed in October ? or 6.0% of the active population ? with 10.87 million of them in the eurozone. Powered by Capital Market – Live News