Equities in Europe joined a rally that was taking place all around the world on Thursday, and they reached new record-high levels. The companies that led the rise were technology companies and miners.
This occurred as a result of the fact that investors were pushed to take a risk-on position as a result of dovish signals coming from a number of major central banks.
Not only did the pan-European STOXX 600 index (.STOXX) complete the day with a record closing high at a level that was 0.9% higher than its previous high, but it also reached an all-time intraday top of 510.25 points earlier in the day. This was followed by a record closing high at the end of the day.
After the Federal Reserve of the United States remained steady in its expectation that there will be three interest rate reduction this year, investors moved toward risky assets, which were headed by technology (.SX8P) equities, which led the charge with a gain of 3.2%.
Increases in European semiconductor businesses, such as the heavyweight ASML Holding (ASML.AS), which followed the robust third-quarter sales prediction that was given by the American chipmaker Micron (MU.O), were another factor that contributed to the index's rise.
During the period in which the prices of the majority of metals were rising, the basic resources index (.SXPP), which opens a new tab and includes mining equities, experienced a 2.6% increase. At the beginning of the trading session, the price of gold achieved an all-time high, which was a contributing factor to the overall increase.
Meanwhile, in a shocking turn of events, the Swiss National Bank lowered its primary interest rate by 25 basis points, bringing it down to 1.50%. Both of these developments occurred simultaneously. As a result, it became the first major central bank to loosen the more stringent monetary policy that had been implemented with the intention of preventing inflation.
At this moment, it would appear that central banks are getting closer and closer to the point where they may declare victory in their war against inflation. It has been reported by Hussain Mehdi, who is the director of investment strategy at HSBC Asset Management, that several financial institutions, such as the Swiss National Bank, have already started lowering their interest rates.
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