Sept 13 (Askume) – European shares ended the week with gains, supported by technology, real estate and mining stocks, while investors turned their attention to the United States ahead of long-awaited monetary easing at a meeting next week.
The pan-European Stoxx 600 index (.STOXX) gained more than 1% this week, rising 0.7% on the day to 515.75 points.
German stocks , led by Siemens Energy (.GDAXI), outperformed their European peers, gaining nearly 1%.(.ENR1n.DE) and SAP (SAPG.DE) were boosted by higher share prices .
France’s CAC 40 index (.FCHI) rose 0.4% as preliminary data showed consumer prices in the region’s second-largest economy rose 2.2% year-on-year in August.
Automobiles (SXAP) topped the charts, rising 1.6% for their best daily gain in more than a month.
Technology stocks (.SXKP) and real estate shares (.SX86P) boosted the market the most, followed by mining stocks (.SXPP) up 1.3%, as copper prices rose for a second consecutive week ahead of a Chinese holiday and stimulus hopes rose 1.3%.
Policymakers are expected to cut interest rates in October after the European Central Bank (ECB) cut its deposit rate to 3.5% on Thursday .Sources told Askume that nothing was expected other than a sharp downgrade in growth prospects.
Two ECB policymakers – François Villeroy de Gahout and Joachim Nagel – on Friday expressed confidence in the euro zone’s prospects for low inflation and low interest rates .
Investors are now placing bets on the size and magnitude of the Fed’s rate cut next week, with money markets predicting a roughly 40% chance of a 50 basis point rate cut on Sept. 18.
Gene Salerno, chief investment officer at SG Kleinwort Hambros, said: “We still expect the Fed to cut interest rates by 25 basis points, but we are still very far from neutrality and a 50 basis point cut could be considered a rate cut. A red flag. To watch. So in that sense, it’s entirely possible that they could make a bigger cut next week.”
Bill Dudley, former president of the Federal Reserve Bank of New York, said he believes there is a strong case for a 50 basis point rate cut.
In other stocks, stock giant AstraZeneca (AZN.L) fell after Deutsche Bank downgraded the stock to “sell” and lowered its price target on Friday.
Worldline (WLN.PA) shares fell 14.4% to a record low after it issued another profit warning and announced the resignation of its chief executive .
