Shares in European markets reached their highest level in history in the first half of the week. The pan-European STOXX 600 index climbed above 447 points on Tuesday and maintained Its closing value on Wednesday.
Two key factors were behind the strengthening of European stocks. The first is signals from the European Central Bank that it will keep its monetary policy loose for some time to come, much like the US Fed. The second is growing confidence in the German economy, which is the strongest economy not only of the eurozone and the European Union but also of Europe as a whole. The STOXX 600 index has gained nearly 12 percent since the beginning of this year. Year on year, it is about a quarter higher.
Confidence in the German economy continued to improve in May. The Munich-based Ifo Institute, which regularly publishes the data, said traders’ expectations had reached a higher level than they were on the eve of the coronavirus pandemic. In the manufacturing sector alone, export expectations fell slightly in May from 23.9 in April to 23 points in May. Still, it remains at its highest level since mid-2017, when export expectations reached comparable levels.