LONDON – European equities moved slightly higher on Thursday as markets around the world responded to the Federal Reserve’s latest outlook on the US economy.
The pan-European Stoxx 600 gained 0.2% with banks jumping 1.5% while utilities shook down 0.7%. German DAX was the standout in the region and reached a record early in Thursday’s trading.
European markets mostly follow positive global sentiment after comments from the Fed, which concluded a two-day meeting on Wednesday. US equities rose in the overnight session on Wednesday night, after the Fed said it did not currently expect to raise interest rates until 2023.
Fed Chairman Jerome Powell reiterated that the central bank wants inflation constantly above its 2% target, and significant improvement in the US labor market, before considering rate changes or monthly bond purchases.
The Fed also said it expects gross domestic product to grow by 6.5% in 2021, before cooling later and rising inflation by 2.2% this year, measured by consumption spending.
In Europe, the Bank of England will meet on Thursday, although no policy change is expected. Meanwhile, European markets are awaiting the conclusion of the European Medicines Agency’s (EMA) safety review of the coronavirus vaccine developed by AstraZeneca and the University of Oxford. The safety committee meets Thursday.
German carmaker Varta climbed 5.5%, while the country’s largest credit providers, Deutsche Bank and Commerzbank, both added more than 4%.
At the bottom of the European blue chip index, the Swiss online pharmacy Zur Rose Group fell by more than 8% after its earnings report over the year.
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