London’s FTSE 100 index hit an all-time high at 8,364.04 points on the eve of a monetary policy decision from the BoE, which is predicted to hold rates but could flag a summer cut
European stocks rose Wednesday, with London hitting another record high, led by hopes of interest rate cuts while Wall Street closed mixed on another day without major macroeconomic news.
London’s FTSE 100 index hit an all-time high at 8,364.04 points on the eve of a monetary policy decision from the BoE, which is predicted to hold rates but could flag a summer cut.
Frankfurt and Paris stocks also rose, shrugging off Asian losses, supported by speculation that the ECB could also decide to cut rates soon.
Sweden’s central bank cut its key interest rate for the first time in eight years on Wednesday, citing dropping inflation and hinting at two more cuts before year-end.
The move comes around two months after the Swiss National Bank became the first major Western central bank to lower its rates after a cycle of hikes across Europe and the US, aimed at taming increasing consumer prices spurred by the Russian invasion of Ukraine and the economic rebound after the pandemic.
The US Fed, however, is not expected to cut rates before September as inflation remains stubbornly high in the world’s largest economy.
On Wednesday, the Dow gained while the Nasdaq dropped.
A handful of prominent earnings reports have commanded focus in New York in a week with few major economic reports following last week’s heavy calendar that included April jobs data and a Fed decision.
European stocks are rising on hope that borrowing costs will soon be lowered, City Index analyst Fiona Cincotta told AFP, noting that Frankfurt’s DAX was also near its record.
The Bank of England is expected to leave rates unchanged but could start to pave the way for a rate cut in the coming months, Cincotta added.
The pound dropped against the dollar and euro on the prospect of lower rates, also lifting London equities by making UK shares cheaper for foreign investors.
