[런던=뉴스핌] Correspondent Jang Il-hyeon = On the 17th (local time), stock markets in major European countries rose simultaneously.
The European Central Bank (ECB) cut interest rates by 25bp (1bp = 0.01% point) for the third time this year, boosting stock investment sentiment. The interest rate was cut twice in a row since last September, and this was the first time in 13 years since December 2011.
The STOXX600 index, a pan-European index, closed at 523.91, up 4.31 points (0.83%) from the previous day. Reuters said, “European stock markets closed less than 1% from their all-time high (528.08).”
The DAX index of the Frankfurt stock market in Germany closed at 19,583.39, up 150.58 points (0.77%), and the CAC40 index of the Paris stock market in France closed at 7583.73, up 91.73 points (1.22%). German benchmark indices hit record highs.
The London stock market’s FTSE 100 index also rose 56.06 points (0.67%) to 8385.13, and the Milan stock market’s FTSE-MIB index closed at 35,038.73, up 378.73 (1.09%).
On the other hand, the IBEX35 index of the Madrid stock market in Spain closed at 11,904.50, down 92.20 (0.77%).
The market was already predicting an interest rate cut by the ECB with a ‘100% probability.’ This is because inflation was rapidly slowing, and economic growth in the Eurozone (20 countries that use the euro) was under a dark cloud.
The Eurozone’s consumer price inflation rate in September recorded 1.7%, falling below the ECB’s policy target of 2% for the first time in three years and five months. On the other hand, this year’s economic growth rate has been lowered from 0.9% to 0.8%.
“The ECB has cut interest rates for the second time in a row, abandoning its quarterly rate-cutting cycle,” said Matthew Landon, global markets strategist at JP Morgan Private Bank. “It sends a clear signal to markets that concerns within the ECB are shifting from inflation to economic growth.” “It was sent,” he analyzed.
The ECB did not give a clear hint on the future direction of interest rate management on this day. He repeated his previous position, “We will look at the data at every meeting and make a decision.”
However, experts predict that the ECB will step on the accelerator to lower interest rates in the future.
“This will not be the ECB’s last rate cut of the year,” said Dean Turner, chief euro zone economist at UBS Global Asset Management. “There is a high possibility that there will be another rate cut in December.” He said, “A decision to lower interest rates will be made at all meetings by June next year.”
In the US, there was news that retail sales were strong and unemployment claims were lower than expected.
The U.S. Department of Commerce announced today that retail sales in September increased 0.4% from a month ago. Compared to the 0.1% increase in August, the increase has become more pronounced.
Additionally, the number of new unemployment claims last week was 241,000, an increase of 19,000 from the previous week, but 20,000 fewer than experts expected.
Accordingly, the forecast that the U.S. Federal Reserve (Fed) will further cut interest rates next month has strengthened.
Among major sectors in the European stock market on this day, the aerospace and defense industry rose 2.6%, lifting the overall index to the forefront. Financial services (+1.20%), banks (+1.06%), and industrial goods (+1.41%) also showed an upward trend.
Among the featured stocks, Finnish bank Nordea surged 6.3% after raising its earnings forecast and announcing a new share repurchase program. On the other hand, Nokia fell 2.5% with the announcement that third quarter sales fell short of market expectations. Nokia has laid off about a fifth of its workforce across China and plans to cut 350 more jobs across Europe, Reuters reported.
