European shares advanced for a fourth day, set for their longest winning streak since July, fueled by hopes that the Federal Reserve’s rate-hiking cycle is over.
The Stoxx Europe 600 Index rose 1.6% as of 9:30 a.m. in London, with real estate and technology shares gaining the most. Novo Nordisk A/S shares provided the second-biggest boost to the index after the drugmaker reported a surge in third-quarter sales as demand continued unabated for its obesity and diabetes blockbusters.
Among other single stocks, Deutsche Lufthansa AG jumped after the airline said it’s on track to meet its financial targets this year and in 2024. Shell Plc gained after it accelerated the pace of share buybacks, while gambling company Entain Plc fell after taking a hit to Ebitda due to predictable football results in October.
Investor sentiment got a boost on Wednesday evening after the Fed left interest rates on hold for a second time and Chair Jerome Powell hinted that the hikes may be over. The Bank of England is expected to hold interest rates at the highest level since 2008 when it meets today.
Read more: Bank of England May Leave Rates at 15-Year High: Decision Guide
European shares are having a good week, following a rout in October that brought the gauge close to erasing the year’s gains. Investors remain focused on monetary policy, while parsing the latest company results and tracking developments in the Israel-Hamas war.
“Yesterday’s decision was pretty much expected. Now the question is how fast long-term bond yields will drop over the coming quarters as growth slows down in the US and the European economy faces a recession,” said Liberum strategist Susana Cruz. “Although we still see some upside coming from declining yields, I think growth fears, and poor results as the ones we’ve seen so far in Europe, will drag down equities over the next six to nine months.”
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--With assistance from Farah Elbahrawy.
Author: Macarena Muñoz