European stocks increase on Powell’s comments and energy earnings

LONDON: According to traders, European stocks increase on Wednesday as a result of Jerome Powell’s “calming” comments and soaring energy industry profits, with London reaching a record high.

On new wagers on recovering Chinese demand as the superpower exits nearly three years of rigorous zero-Covid limits, oil prices jumped sharply.

The FTSE 100 index in London reached a record high of 7,934,30 points.

As in the case of UK competitors BP and Shell, phenomenal annual profits at French energy giant TotalEnergies and Norwegian competitor Equinor caused the Frankfurt and Paris indices in the eurozone to soar.

After Russia’s assault on Ukraine, a major energy producer, oil and gas prices have skyrocketed, generating enormous profits for the sector.

Traders also considered Powell’s comments, who underlined Tuesday that inflation was declining but acknowledged that higher interest rates may be required than anticipated to bring it under control.

“Solace message”

Russ Mould, investment director at AJ Bell, said that Powell provided the market with the comforting message it needed.

In addition, the FTSE 100 has reached new heights, achieving a fresh all-time high, due to the optimistic sentiment.

A slew of significant US data points in recent months suggested that a series of large hikes made last year were starting to pay off, stoking anticipation that the Fed would pause its cycle of tightening and even decrease borrowing costs at year’s end.

However, a jobs report released on Friday that defied expectations and showed that 500,000 new positions were added in January fueled the rumour that further rises were imminent.

Mould eased concerns that the Fed might react to an overheating labor market, stating that Powell’s mild response potentially reflected the seasonal anomalies that frequently distort the January statistics, following last Friday’s bumper employment data.

If the following set of payroll statistics are equally high, it’s unclear if Powell will continue to act so casually, he added.

Additionally, Powell’s comments echoed those he made last Wednesday during the bank’s most recent policy meeting, which prompted a rise in the stock market.

Tuesday saw Wall Street increase once more.

Next week’s US inflation figures will be closely watched.

Moreover, according to Interactive Investor analyst Richard Hunter, the hopes that inflation is declining and the aggressive interest rate increasing program of central banks may be reaching its peak have given key indices a great start to the year.

However, The “investment glass is half-full” at the moment, despite the fact that the “current round of optimism will face further challenges in the months to come.”

important numbers around 1200 GMT

FTSE 100 in London is up 0.7 percent at 7,920.54 points.

Frankfurt’s DAX closed at 15,428.50, up 0.7 percent.

Paris’ CAC 40 increased by 0.5% to 7,164.14.

EURO STOXX 50: At 4,226.93, it is up 0.4 percent.

Nikkei 225 in Tokyo is down 0.3 percent at 27,606.46. (close)

At 21,283.52, the Hong Kong Hang Seng Index is down 0.1 percent. (close)

Shanghai Composite: 3.232.11 is down 0.5 percent (close)

Dow Jones in New York is up 0.8 percent to 34,156.69. (close)

Up at $1.0750 from $1.0726 on Tuesday for the euro/dollar.

Dollar/pound: up at $1.2105 from $1.2048

Down at 88.77 pence from 89.04 pence for the euro/pound.

Dollar/yen exchange rate: down at 130.78 yen from 131.07 yen.

Crude oil from the North Sea, Brent, is up 1% at $84.55 per barrel.

At $78.14 per barrel, West Texas Intermediate is up 1.3 percent.