Rate Cut Hopes Boost European Stock Markets

(RTTNews) - Optimism over interest rate cuts had traders in a happy mood on Friday as the major European stock markets finished solidly to the upside, extending recent gains.

Federal Reserve Governor Christopher Waller told CNBC on Thursday that the U.S. central bank could lower interest rates multiple times this year if inflation continues to ease as expected.

Closer home, ECB Governing Council member Yannis Stournaras said on Thursday that "policy should continue with a series of rate cuts at the next meetings." Traders expect a 100-basis point cut from ECB this year.

Germany's DAX rallied 248.00 points or 1.20 percent to finish at 20,903.39, while London's FTSE spiked 113.32 points or 1.35 percent to close at 8,505.22 and the CAC 40 in France gained 75.01 points or 0.98 percent to end at 7,709.75.

In Germany, Siemens Energy surged 3.06 percent, while Heidelberg Materials spiked 3.02 percent, Daimler Truck Holding jumped 2.00 percent, Deutsche Post climbed 1.98 percent, Deutsche Bank advanced 1.74 percent, Infineon Technologies improved 1.72 percent, Merck slumped 1.40 percent, BASF added 0.68 percent, Deutsche Borse and Volkswagen both rose 0.52 percent and Deutsche Telekom was unchanged.

In London, Entain skyrocketed 6.29 percent, while Smiths Group surged 5.50 percent, Prudential accelerated 4.93 percent, Scottish Mortgage rallied 2.45 percent, British American Tobacco strengthened 1.75 percent, Rolls-Royce Holdings improved 1.59 percent, EasyJet gained 1.31 percent, Haleon collected 0.97 percent, Rightmove rose 0.49 percent and Vodafone Group perked 0.12 percent.

In France, Carrefour plummeted 4.95 percent, while Atos tanked 4.76 percent, Veolia Environment soared 2.24 percent, Engie rallied 1.55 percent, Vivendi surrendered 1.01 percent, Danone advanced 0.87 percent, Credit Agricole and Sanofi both rose 0.32 percent, Societe Generale perked 0.07 percent and BNP Paribas was up 0.05 percent.

In economic news, UK retail sales declined unexpectedly in December on falling food store sales, data from the Office for National Statistics showed Friday. Retail sales volume decreased 0.3 percent on a monthly basis in December, in contrast to the revised 0.1 percent increase in November and confounding expectations for an increase of 0.4 percent.

Eurozone inflation rose to a five-month high in December, as initially estimated, final data from Eurostat showed on Friday. The harmonized index of consumer prices climbed 2.4 percent from a year ago, following a 2.2 percent gain in November. The rate was the fastest since last July, when prices grew 2.6 percent. Core inflation that excludes prices of energy, food, alcohol and tobacco held steady at 2.7 percent in December.

The euro area current account surplus fell to a three-month low in November, the European Central Bank said Friday. The current account surplus decreased to EUR 27 billion from EUR 30 billion in October. This was the lowest since August, when the surplus was EUR 23.5 billion.