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27 May, 2022 11:58

Europe midday: Shares extend gains on central bank rate clarity

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European shares extended gains on Friday on the back of a Wall Street rally and positive closes in Asia as investors became more comfortable with central bank efforts to tackle inflation.

The pan-European Stoxx 600 index rose 0.93% with all major bourses in positive territory.

“After a torrid few months, there are some tentative signs of green shoots emerging as investors become more comfortable with the stance of the central banks in tackling inflation,” said Richard Hunter at Interactive Investor.

“The recent Federal Reserve minutes confirmed that further hikes in June and July were on the table, but that it would remain flexible thereafter.”

“This has provided something of a relief rally to investors on two fronts, the first of which being that the statement could signal a pause in rate hikes in the autumn. At the same time, there is also the possibility that the Fed’s hawkish stance has now been fully priced in to markets, which could signal the return of some opportunistic buying.”

AJ Bell financial analyst Danni Hewson said said investors "feel a little happier that they know where things are going to go, and also that there's going to be a real focus from central banks to make sure that they do take a measured approach... to create this soft landing to prevent economies from going into recession".

On a slow day of equity news, shares in Auto1 Group fell after the online car-selling platform was downgraded to ‘sell’ from ‘neutral’ by JP Morgan.


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Important Legal Notice about News Sources

Pilling and Co Stockbrokers Ltd. is not responsible for the content or accuracy of third party news articles and we may not share the views of the author or publisher.

We provide third party news for your convenience and information only and make no representation or endorsement whatsoever and hereby exclude all liability for any loss or damage that may be incurred by you as a result of your access or use. Please note that third party content may be subject to terms and conditions imposed by the third party owner of that content.

The value of investments can fall and you may get back less than you invested.