On Wednesday, the leading stock indices of Western Europe closed on the positive side. Sentiment has been boosted by the results of the trading day on the Asian session.
Thus, the pan-European Stoxx 600 soared by 1.1% - to 438.09 points.
By the way, the Stoxx 600 fell by 13% in 2022. This decline was the sharpest since 2018, and experts blame the negative consequences of the situation in Ukraine, the global energy crisis, as well as the permanent acceleration of inflation and decisive actions of global central banks to combat it as its main reasons.
On Wednesday, the French CAC 40 gained 1.3%, the German DAX gained 1.21%, and the British FTSE 100 gained 0.33%.
Meanwhile, the CAC 40 fell 8.7%, the DAX fell 11.9% and the FTSE 100 rose 1.4% last year.
Leaders of growth and decline
The share price of German software company SAP grew by 1.3%.
German technology company Siemens AG increased by 1.2%.
The share price of German semiconductor manufacturer Infineon Technologies rose by 1.8%.
German insurance company Munich Re soared by 3.3%
The share price of the largest German insurance company Allianz SE rose by 1.8%.
British insurer Prudential Plc gained 2.6%.
The share price of British corporation providing financial services Standard Chartered has grown by 1.9%.
European oil companies British Petroleum, Shell and Glencore has fallen by 2.4%, 2.0% and 3.4% respectively.
Market sentiment
On Wednesday, European stock exchanges rose on the positive results of the Asia-Pacific Region (APR) stock markets trading. In addition, traders waited for the release of the U.S. Federal Reserve's December minutes, scheduled for late afternoon. Market participants were hoping to find more hints about monetary policy and economic activity in the country in the document of the US central bank.
Recall that during the December meeting, the Fed raised the interest rate by 50 basis points - up to 4.25-4.5% per annum. At the same time, US interest rates set by the Fed rose to their highest since 2007. In a commentary on December's meeting, Fed Chairman Jerome Powell said the US central bank would stay on course to tighten monetary policy until inflation returned to the 2% target.
According to the latest data of the largest North American financial derivatives market CME Group, more than 70% of experts expect the key interest rate in the US to increase by 0.25 percentage point in February, up to 4,5-4,75% per year.
On Wednesday, European investors also analyzed the latest data on the largest countries of the region. Thus, according to preliminary information from France's National Statistics Office (Insee), consumer prices in the country rose 6.7% y/y in December. The inflation rate fell compared with the November rate of 7.1%. In this case, experts on average predicted an increase in December by 7.2%.
Trading results the day before
On Tuesday, the leading stock exchange indicators of Western Europe closed in the green zone. European investors received a boost as they assessed news on easing of Covid controls in China. Food and pharmaceutical sectors led the growth.
Thus, the Stoxx 600 soared by 1.1% to 433.12 points.
French CAC 40 gained 1.48%, German DAX gained 1.55% and British FTSE 100 gained 2.21%.
The share price of Uniper, a German energy company, soared by 12.2%.
Oil companies British Petroleum, Shell and TotalEnergies gained 3.9%, 4.5% and 1.2%, respectively.
The share price of German tour operator TUI rose by 6.1%.
French banks Societe Generale, BNP Paribas and Credit Agricole rose by 1.5%, 1.5% and 1.2%, respectively.
Adidas AG, a German manufacturer of clothing, footwear and accessories, rose by 2.4%.
German energy equipment manufacturer Siemens Energy rose 1.4 percent.
The share price of German chemical concern BASF rose by 1.2%.
On Tuesday, European investors assessed news on easing of Covid controls in China, which have been among the strictest in the world over the past few years. China will lift mandatory quarantine measures for inbound travelers from January 8. A negative test for coronavirus will be required to enter the country.
In addition, Beijing authorities reduced the level of surveillance of the coronavirus, rejecting the legal basis for the introduction of enhanced infection control measures.
In response to this move by Chinese authorities, some states have tightened requirements for visitors from the PRC. The United States, for example, is introducing mandatory testing for people arriving by air from China as of Jan. 5.
Traders around the world have recently been seriously concerned about China's "zero-Covid" policy, as new and existing restrictive measures in China have had a negative impact on the country's economic activity as well as on stock trading.
At the end of November, mass protests erupted in Shanghai against China's stringent Covid restrictions. The police dispersed protesters with gas canisters.
After that, markets began to hope that mass protests in Chinese cities would force local authorities to loosen regional restrictions. Fresh news from China sent a welcome positive signal that the world's second-largest economy could return to robust growth.
