On Friday, a basket of European bourses had winded down the day slightly higher after digesting heavy downpour in the previous session, however, had marked up their steepest weekly plunges since the peak of the pandemic-driven sell-off wave as investors’ prospect of an earlier-than-anticipated economic recovery had hit a dead-end following Wednesday’s Fed projection, while the Fed policymakers had projected a 6.5 per cent contraction in US economy this year.
Apart from that, Friday’s marginal gain in European stocks came forth as the European stocks had been retreating from a nearly three-month high throughout the week, while the sell-off pressure had intensified on Thursday after the Fed Chair Jerome Powell had projected a downcast outlook for the US economy and had hinted a dovish stance for the US Central bank at least until the end of 2022.
Fed’s Powell plummets market optimisms, say analysts
Besides, in what could be seen as a much-required market-mutilation inflicted by the US Fed in exchange for a post-pandemic resurrection, the Fed policymakers had also forecasted an unemployment rate of 9.7 per cent by end-2020, while followed by the Fed-driven mass-scale sell-off on Thursday, the regional pan-European STOXX 600 ended up Friday’s market 0.3 per cent higher, however the index had reported 5.7 per cent weekly plunge with travel and tourism stocks leading the losses.
Citing statistics, on Friday’s European market round off, London’s FTSE 100 soared 0.47 per cent to 6,105.18, French CAC 40 added 0.49 per cent to 4,839.26, while Frankfurt’s DAX had winded up the day down by 0.18 per cent to 11,949.28.
Elsewhere in the Europe, Madrid’s benchmark IBEX 35 rose by 0.20 per cent to 7,292.70, while Italy’s FTSE MIB gained 0.43 per cent to curtain off the day at 18,888.16. Meanwhile, citing that the market prospects appeared to have fallen short of steam to outweigh the downbeat projections of the US Fed, a head of portfolio management and research at GenTrust, Neela Gollapudi said on Friday, “You have run up for so long, the market is looking for an excuse to pause.
Fed’s Powell said we are not going to have a V-shaped recovery, and the markets were priced to perfection in terms of how quickly things are going to turn around. ”