On Friday, a swathe of major European stock indices had closed out the session in an upbeat note, as an unprecedented gain in energy and retail sectors coupled with a US Fed confirmation that there would not be a rate hike in a near term, had spurred up investors’ optimism to bet on riskier assets. Although, the regional pan-European STOXX 600 wrapped up the day 1.1 per cent higher following strong gains in energy stocks with oil and gas prices soaring due to a resumption of Colonial Pipeline operation which had been forced to shut down its pipeline networks earlier last week because of a cyber-attack, the index ended the week 0.5 per cent lower as fresh signs of an uptick in US inflation had led to investors’ belief that a rate-hike might be imminent.
Major European stock indices rise, but post weekly declines
Citing statistics, in the day’s European market round off, London’s blue-chip index FTSE 100 gained 1.15 per cent to 7,043.61 and French CAC 40 climbed 1.54 per cent to 6,385.14, while Frankfurt’s DAX added 1.43 per cent to 15,416.64.
Elsewhere in the Europe, Italy’s FTSE MIB surged 1.14 per cent to 24,766.09, while Madrid’s benchmark IBEX 35 skyrocketed as much as 2.0 per cent to wind up the day session at 9,145.60. On the week, London’s FTSE 100 shed 1.16 per cent, French CAC 40 lost 0.71% and Frankfurt’s DAX edged 0.01% lower, while Italy’s MIB FTSE faltered 0.39%, however, against market trend, Madrid’s IBEX 35 had clocked a 0.3 per cent weekly gain.
Meanwhile, referring to a growing investors’ bet on cyclicals which would likely to be benefitted by the most following a re-opening of economy, an investment strategist at Bank of American Global Research, Sebastian Raedler wrote in a client note, “We see a further 5% upside for the STOXX 600, as well as 10% further outperformance for cyclicals versus defensives, value versus growth and financials, all of which benefit from both accelerating growth and rising bond yields. ”