European Shares Turn Higher After Powell Speech

 European Shares Turn Higher After Powell Speech

European Shares Turn Higher After Powell Speech

During Thursday's trading session, the European shares were at six month high as the investors turned optimistic after Powell's speech. In his speech, Jerome Powell (Fed chair) hinted about doing smaller rate hikes. In addition, the markets were also optimistic after China's decision to loosen up some of its harsh COVID-19 restrictions.

As a result of all this optimism, the STOXX 600 index gained 0.6% during the Thursday session. And for the month of November, STOXX 600 is already up by 6.8%, which will make it the 2nd best month of 2022 since July.

Tech Sector Lends Support

Among all the different stock sectors, the tech stocks managed to register the biggest gains. One particular stock which also lends strength to other technology stocks is Salesforce which raised its future profit forecast.

If we look at the energy stocks, they basically slumped mainly due to the upcoming OPEC+ meeting and the drop in oil prices.

But the biggest news of all is most definitely China which is expected to ease its harsh anti-COVID protocols. We also need to remember that Chinese authorities only did this after mass public protests.

Overall, the tough COVID-19 restrictions set by China have raised fears of a slow global earth. And when we combine it with the energy crisis in the Euro area, it gives us the perfect recipe for a recession.

Euro Zone Inflation Shows Sign Of Slowing Down

Another piece of good news was the eurozone inflation data which showed a much lower increase than market expectations. Once again, this has raised the optimism that the ECB will pursue a less aggressive policy.

In addition, we also got the German retail sales data which showed that it was a lot less than the market expectations. According to experts, this is yet another case that will make the ECB less hawkish.

In general, the luxury stocks were down, which made the CAC 40 underperform when compared with its regional peers.

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