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European Markets Rally on ECB Cuts and China’s Support

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FxNews—European markets ended the day significantly up on Friday, floated by expectations that the European Central Bank (ECB) will further reduce key interest rates. Positive shifts favoring companies heavily invested in China also played a role.

The People’s Bank of China (PBoC) has initiated two new measures to inject liquidity into purchasing stocks. This move has particularly benefited the luxury and automotive sectors in Europe.

European Luxury Brands Rally, Erase Weekly Losses

Notable European companies saw a rebound in their stock prices. Luxury brands like LVMH, Hermes, and Kering saw increases from 1% to 3.5%, helping to mitigate earlier losses in the week.

Automotive giants such as Volkswagen, BMW, and Mercedes also experienced gains ranging from 0.7% to 1.4%. ASML witnessed a near 4% rise, recovering some ground after a steep decline earlier in the week caused by disappointing earnings forecasts.

Following a 0.25% reduction in its main interest rates, the ECB has set the stage for possibly another rate cut in December. This action comes amid slowing growth and diminishing inflation, influencing market expectations and investments.

  • 2024-10-18
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