Stock markets in Europe finish higher

by Jonathan Adams
Stock markets

Equity markets in Paris and Frankfurt rose following the ECB’s dovish policy stance

Stock markets in Europe finished on a high note Friday, while the S&P 500 hit a second record in a row as investors weighed US consumer confidence and inflation data.

Equity markets in Paris and Frankfurt rose following a dovish policy stance by the ECB even as it raised its growth forecast.

ECB chief Christine Lagarde on Thursday said it would be “too early and premature” to discuss tightening monetary policy, even as officials raised their annual inflation outlook.

European markets have ripped higher to close the week in a bullish mood, Fawad Razaqzada, analyst at ThinkMarkets, told AFP.

With the central bank covering their backs, investors bought every single short-term dip in stocks, causing the Euro Stoxx 50 and the CAC 40 to hit new highs for the year on Friday, with the German DAX also nearing its record high hit last week, he said.

Meanwhile, economic recovery in Britain accelerated as GDP grew by 2.3 percent in April as the government eased the lockdown measures, according to official data released Friday.

In the US, major indices closed the session with modest gains.

According to a report released Friday from the University of Michigan, there was a rise in consumer confidence as shoppers were back to stores following widespread availability of Covid vaccines.

Looking ahead, we expect consumers will be more upbeat as the economy continues reopening and employment conditions heal further, Oxford Economics said in a note. Current pandemic-related supply constraints will steadily ease, supporting a healthier labour market and easing price pressures as economic dynamics normalize.

Consumer prices were at their highest levels since 2008, according to government data released Thursday. But the S&P 500 still ended the week at record levels as investors considered May data to be a peak for inflation.

Oil prices also gained after the International Energy Agency said the demand for crude was set to rise above the levels seen prior to the pandemic by the end 2022.

This article is for information purposes only.
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