European equities gained, tracking a rally in US peers, as investors anticipated the region’s central bank will cut interest rates further to protect the economy from any severe damage.
The Stoxx Europe 600 Index gained 0.5% by 8:17 a.m. in London. The technology, retail and industrial sectors led the advance, while autos were lower.
Among individual stocks, Deliveroo Plc rallied as much as 6% following a report that US meal delivery group DoorDash Inc. held failed talks about a takeover with the UK company. Atos SE, the troubled French IT firm, was volatile after saying that Onepoint has withdrawn from talks to bail it out and that billionaire Daniel Kretinsky’s EPEI has expressed an interest in restarting discussions.
European Central Bank Governing Council member Olli Rehn said investor expectations for two more cuts in 2024 are reasonable. While officials must ensure inflation returns to 2%, they shouldn’t overly damp economic activity, he told Bloomberg News in an interview.
European equities have been volatile in June, with political turmoil in France offsetting optimism about resilient economic growth and the outlook for interest rate cuts. Strategists don’t see any upside left for regional stocks as they adopt a wait-and-see stance ahead of elections in France that could bring big changes for economic policy.
Still, a brighter outlook for corporate results is helping to sustain the more positive views on what lies ahead for markets.
“We remain bullish for the second half of the year. Our leading indicators for company earnings are pointing to a continued recovery,” Liberum strategist Susana Cruz said. “The prospect of interest rate cuts supports our view and the margin outlook.”
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With assistance from Michael Msika and Sagarika Jaisinghani.
This article was generated from an automated news agency feed without modifications to text.
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Published: 26 Jun 2024, 11:57 PM IST