European stock markets start new month on positive notewritten by Bella Palmer
The DAX index in Germany traded up 0.6 per cent, the CAC 40 in France traded 0.7 per cent higher and the FTSE 100 in the U.K. gained 0.5 per cent
European stock markets gained Friday, extending November’s positive momentum on renewed hope that the ECB has completed its rate-hiking cycle.
At 08:05 GMT, the DAX index in Germany traded up 0.6 per cent, the CAC 40 in France traded 0.7 per cent higher and the FTSE 100 in the U.K. gained 0.5 per cent.
European stocks recorded in November their best month since January, as easing inflation boosted talk that the ECB is done with rate hikes.
These expectations were added to Thursday after data showed that eurozone inflation dropped to 2.4 per cent in November, down from 2.9 per cent in October and considerably lower than expected.
ECB officials have been keen to play down expectations of rate cuts next year, but the new governor of the Bank of Italy, Fabio Panetta, who is also a member of the ECB’s governing council, said on Thursday that the ECB must not cause unnecessary damage to the economy and financial stability through sustained high interest rates.
ECB President Christine Lagarde is set to speak later in the session, ahead of an appearance from Federal Reserve Chair Jerome Powel, and their views on future monetary policy will be heard carefully.
The latest data on manufacturing activity in the eurozone is due for release later in the session, and is expected to confirm that this important sector remains firmly in contraction territory in November.
Adding to the positive tone, a private survey showed an unexpected bounce back in Chinese manufacturing activity in November.
China's private Caixin/S&P Global manufacturing purchasing managers' index unexpectedly increased to 50.7 in November from a 49.5 reading in October, exceeding the 50 mark separating growth from contraction.
Nevertheless, the reading came a day after an official survey showed a contraction in both manufacturers' and non-manufacturers' activity, underscoring problems in the world's second largest economy, and a major export market for Europe’s top companies.
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