The Pan-European STOXX 600 The index rose 0.7% to 515.75 points on the day, while it posted gains of more than 1% during the week.
German stocks outperformed their European peers with a jump of almost 1%, boosted by a rise in shares of Siemens Energy and SAP.
France’s CAC 40 rose 0.4% after consumer prices in the region’s second-largest economy rose 2.2% year-on-year in August, in line with its preliminary reading.
Autos were the biggest gainers, rising 1.6% and recording their best day in more than a month.
Technology and real estate gave the market its biggest boost, followed by mining stocks which advanced 1.3%, as copper prices The dollar hit a two-week high on buying ahead of a Chinese holiday and amid stimulus hopes. After the European Central Bank (ECB) cut its deposit rate to 3.5% on Thursday, policymakers do not foresee an interest rate cut in October unless there is a major deterioration in the growth outlook, sources told Reuters. Two of the ECB’s policymakers – Francois Villeroy de Galhau and Joachim Nagel – expressed confidence on Friday in the prospect of lower inflation and interest rates in the euro zone.
Investors are now betting on the size and extent of the US central bank’s rate cut next week, with money markets pricing in a nearly 40% chance of a 50 basis point reduction on September 18.
“We continue to expect the Fed to cut 25 basis points, but we are so far from neutral at this point that a 50 basis point cut should not be seen as a sign of danger on the horizon. So in that sense, it’s entirely possible that they will cut more sizable rates next week,” said Gene Salerno, chief investment officer at SG Kleinwort Hambros.
Former New York Federal Reserve chief Bill Dudley said he believed there was a strong case for a 50 basis point cut.
Among others, the heavyweight AstraZeneca fell after Deutsche Bank downgraded the stock to “sell” and lowered its price target on Friday.
Worldline shares fell 14.4% to a record low after another profit warning and the announcement of the departure of its CEO.
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