European stocks hit a three-week high on Thursday, buoyed by signs of easing inflation, upbeat results from retail giant H&M, and easing concerns about the global banking sector, sparking an overnight rally on Wall Street.
European stock market Analysis
The pan-European STOXX 600 index increased by 0.8% to its tenacious level since the 10th of March after major US stock indexes increased on Wednesday.
The standard S&P 500 ended above its 50-day moving average for the first time since the 6th of March, before the start of the banking crisis.
The European real estate sector rose by 3.2% as immediate concerns over the prospects for the heavily indebted sector eased after a sharp decline in March brought it closer to last year’s 10-year lows.
Banks increased by 1.8% to a weekly high as investors welcomed the sales of assets by the collapse of Silicon Valley Bank and the takeover of ailing Swiss lender Credit Suisse.
“It’s a combination of easing bank fears and the expectations that we are very close to peak interest rates that are driving indices higher,” said Susannah Streeter, head of currency and markets at Hargreaves Lansdown. As the contagion appears to be steady for now, it’s bringing relief to housing markets, and we are hoping that rate hikes will end soon.
Market rally fueled by Spanish CPI data and positive earnings reports
The sentiment was further boosted by data showing that Spanish consumer price inflation slowed to 3.3% in March from 6.0% in February, the lowest annual rate since August 2021.
“Spain’s CPI is a very good one indeed News and appears to have given the markets another reason to rally,” said Chris Beauchamp, senior market analyst at IG.
H&M increased by 12.7% after the world’s second-biggest clothing retailer reported a surprise December-February operation profit but warned that cold weather would delay overall spring season sales.
Danish wind turbine manufacturer Vestas has increased by 5.9% after winning an order in Brazil.
Phillys, a Dutch health technology company, has seen a 7.5% increase in its market value following the announcement from its CEO, Roy Jakobs, that the company plans to strike a deal for the global phase-out of respirators by the end of the year.
After the news of Sergio Ermotti’s return to UBS Group as CEO on April 5th and the recent merger with Credit Suisse, the share price of UBS surged by 4.5% in the afternoon.
