European shares rise to a fresh high in months
2023-11-24
Summary:
European shares gained, led by energy stocks. ECB meeting minutes revealed policymakers' cautious optimism about declining inflation.
European shares rose on Thursday, pushed higher by energy stocks. Minutes of the ECB’s latest meeting showed that policymakers were cautiously optimistic about falling inflation.
The STOXX 50 closed at a 3.5-month high and has gained over 7% this month. The FTSE 100 logged its first gain in four after Finance Minister Jeremy Hunt announced measures to boost growth.
Trading volumes were thin in the absence of US participant due to the Thanksgiving holiday. Despite weakness in Treasury yields, the eurozone business activity underscored investor concerns.
The eurozone composite PMI ticked up to 47.1 from October's near three-year low of 46.5 but remained firmly below the 50 mark. The bloc’s economy shrank 0.1% last quarter.
Corporate insolvencies are starting to pick up and could rise further as the economic downturn becomes more broad-based and credit costs rise, the ECB warned.
Economic downturn echoed throughout the continent. Employment levels and new orders kept falling in the UK though PMI surprised on the upside for Nov with its service sector back into expansion.
The STOXX 50 broke the ceiling of the falling trend early in the month while the FTSE 100 remains stuck in a tight trading range. But with RSI above 70, the former index may enter a mild correction.
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