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04/07/24
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Shares In Europe Gain on Optimism About Rates
On Thursday, European shares were higher amid optimism about interest rate cuts in the U.S. after soft economic data, while London markets rose as voting started in the UK with opinion polls forecasting a win for the Labor party.
The STOXX 600 pan-European index was 0.4% higher, led by a 1.3% increase in the automobiles and parts sub-index.
This sub-index was driven by Continental, Germany’s automotive supplier, whose shares soared 10.1% to a 3-week high.
The UK’s FTSE 100 rose 0.7%, as markets waited to see how big a majority the Labor Party may win.
Rabobank’s senior macro strategist, Bas van Geffen, said the outcome in the UK, generally expected to be a Labor win, won’t have much effect unless there was a surprising outcome or big upset, as markets have likely already discounted that.
Stocks in France rose for the second day with a 0.6% gain amid intensified efforts by opponents of the National Rally (RN) to stop the far-right party from obtaining power.
Weak data from the U.S. bolstered sentiment on rate cuts as initial applications for U.S. unemployment benefits last week increased, indicating the labor market was cooling.
In May, German industrial orders unexpectedly dropped, falling by 1.6% on the prior month on a calendar and seasonally adjusted basis.
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