Europe open: Stoxx powers ahead after US rate cut; Next surges on upgrade

19th Sep 2024 07:59

(Sharecast News) - European stocks made a strong start on Thursday - up 1% - after the US Federal Reserve's hefty 50 basis point rate cut overnight.

The pan-regional Stoxx 600 sat at 519.36, having touched 520 at one point in early deals. Britain's FTSE 100 was up 0.87% while Germany's DAX climbed 0.72%.

"Global markets had been on edge ahead of the Fed decision, but the subsequent 12 hours have seen a solid recovery in risk appetite," said Chris Beauchamp, chief market analyst at online trading platform IG.

"Fed chair Jerome Powell managed to successfully navigate the press conference, showing how the Fed was keen to maintain the US economy's current strength. Crucially, he seems to have convinced investors that the recent weakness in jobs data was no reason to be concerned."

"With the Fed out of the way, markets may well have some room to rally, confident that the US economy is in a good place. Perhaps we will get that soft landing after all."

Attention now turns to the Bank of England, which is expected to hold rates when policy makers meet later this morning.

In equity news, shares in UK fashion retailer Next rose after the company lifted profits guidance to almost £1bn after a strong rise in recent sales.

Allegro shares slumped after Poland's biggest e-commerce platform forecast slowing earnings growth in the third quarter.

Reporting by Frank Prenesti for Sharecast.com