While stock markets in Asia were affected by the reverberations of the mood following the unexpected change in the US central bank’s monetary policy outlook, financial markets in Europe grew. Among the leaders were automakers and titles from the chemical sector.
European stocks strengthened at the start of a new trading week. The pan-European STOXX 600 index added 0.7 percent and deviated from its lowest level since early June. The index also recorded its highest daily increase in the last three weeks. The main drivers of European stocks were car manufacturers and companies from the chemical industry.
The positive development was mainly due to the announcement by the President of the European Central Bank, Christine Lagarde, that economic growth in the eurozone will pick up earlier than originally expected and that consumers are starting to spend again. Lagarde also confirmed that the European Central Bank will continue to pursue an accommodative monetary policy to support economic growth.
For the time being, the European Central Bank is likely to leave its interest rate setting unchanged, as will the volume of quantitative easing. Although inflation in the euro area rose exactly to the target level in May, ie two percent, countries such as Italy, France or Portugal are below the target. Greece is even still experiencing more than one percent deflation.