European stocks rally as investors digest central bank decisions; Stoxx 600 up 1.5%
KEY POINTS
The Bank of England on Thursday hiked interest rates for the first time since the onset of the pandemic, despite concerns over the rapid spread of the omicron variant in the U.K
The European Central Bank further cut its bond purchases on Thursday but vowed to continue its unprecedented monetary policy support for the euro zone economy into 2022
The U.S. Federal Reserve signalled Wednesday that it would be aggressive on tapering bond purchases and sees several rate hikes in 2022
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LONDON — European stocks jumped on Thursday as investors in the region digested monetary policy decisions from several major central banks
| TICKER | COMPANY | NAME | PRICE | CHANGE | %CHANGE | VOLUME |
|---|---|---|---|---|---|---|
| .FTSE | FTSE 100 | *FTSE | 7266.76 | 96.01 | 1.34 | 612132995 |
| .GDAXI | DAX | *DAX | 15644.64 | 168.29 | 1.09 | 55279913 |
| .FCHI | CAC 40 Index | CAC | 7005.07 | 77.44 | 1.12 | 101536916 |
The pan-European Stoxx 600 climbed 1.5% by late-afternoon, with miners jumping 3% to lead gains as all sectors and major bourses traded in positive territory
Central bank spotlight
The Bank of England on Thursday hiked interest rates for the first time since the onset of the pandemic, despite concerns over the rapid spread of the omicron variant in the U.K
The Bank increased its main interest rate to 0.25% from its historic low of 0.1% as inflation pressures mount, arguing that the economic data satisfied policymakers’ criteria for a hike, while the impact of the variant remains uncertain
The European Central Bank further cut its bond purchases on Thursday but vowed to continue its unprecedented monetary policy support for the euro zone economy into 2022
The ECB left its benchmark refinancing rate unchanged at 0%, while the rate on its marginal lending facility remained at 0.25% and the rate on its deposit facility was kept at -0.5%, in line with expectations
Global investors began the day digesting the Federal Reserve’s signal on Wednesday that it would be aggressive on tapering bond purchases and sees several rate hikes in 2022
The U.S. central bank will begin reducing the pace of its asset purchases in January and buy just $60 billion of bonds each month going forward, compared to $90 billion in the month of December
Projections released overnight indicate that Fed officials see as many as three rate hikes coming in 2022, with two in the following year and another two in 2024
The decision to aggressively ease bond purchases follows recent inflation data showing a 6.8% surge in November, which was higher than expected and the fastest rate since 1982
In terms of individual share price movement, British online retail group THG gained 10% to lead the Stoxx 600 while at the bottom of the index, EDF shares plunged 16% after faults were found at one of its French nuclear power stations, leading the utility giant to cut its core profit goal for the year
On Wall Street, U.S. stocks rose slightly as investors assessed the Fed news. In Asia-Pacific, markets closed mostly higher
