Europe close: Stocks extend gains as Fed chief signals rate cuts lie ahead

23rd Aug 2024 17:11

(Sharecast News) - European stocks pushed higher still at the end of the week after the head of America's central bank clearly signalled that a first interest rate cut in the current cycle was coming in September.

Critically, in his speech at the annual Jackson Hole Economic Symposium, Federal Reserve boss, Jerome Powell, also said: "We do not seek or welcome further cooling in labor market conditions."

In response, the pan-European Stoxx 600 put on 0.46% to 518.13 whilst the German Dax added 0.76% to see the week out from 18,633.10.

Europe's single currency meanwhile came within a whisker of 1.12 versus the Greenback as the US dollar index appeared to lose a key level of technical support.

Front-dated Brent crude oil futures were up by 1.8% alongside to $79.0 a barrel on the ICE.

Likely in risk management mode, Portuguese governing council member, Mario Centeno, told Bloomberg TV that deciding on a rate cut in September would be "easy".

In corporate news, Nestle shares edged up as the food maker announced the departure of chief executive Mark Schneider, who will be replaced by Laurent Freixe.

Elsewhere, Direct Line fell after saying it had made a miscalculation in its 2023 Solvency II own funds. It said the solvency capital ratio at the end of 2023 was 188%, down from 197% but still above its risk appetite range of 140% to 180%.

Melrose Industries was knocked lower by a downgrade to 'sell' from 'buy' at UBS.