European Stocks Higher; Potential U.K. Fiscal U-Turn Boosts Sentiment
European stock markets traded sharply higher Friday, continuing the global rebound after the latest U.S. inflation data, while speculation mounted that the U.K. government will abandon its plans for massive unfunded tax cuts.
By 03:50 ET (07:50 GMT), the DAX in Germany traded 1% higher, the CAC 40 in France rose 1%, and U.K.’s FTSE 100 climbed 1%.
U.S. stocks surged to finish more than 2% higher Thursday, reversing sharp falls, equities in Asia have followed suit and European equities continued the positive tone despite another hot U.S. inflation reading.
Investors are clearly pricing in another leap-up in short-term borrowing costs from the Federal Reserve, but the gains in the global stock markets suggest fears that the inflation gains were going to be even more substantial.
Back in Europe, sentiment has been boosted by reports the U.K. government could abandon the 43 billion pounds ($48.6 billion) of unfunded tax cuts included in its so-called “mini-budget” a couple of weeks ago.
This followed the decision of U.K. Finance Minister Kwasi Kwarteng to cut short his trip to Washington and head back to London late Thursday, with the Bank of England set to end its emergency bond purchases later Friday.
In corporate news, TomTom (AS:TOM2) stock fell 6% after the Dutch navigation and digital mapping company released its third-quarter results, while Ashmore (LON:ASHM) stock fell 2.6% after the investment manager saw its assets under management slip by $8 billion in its first quarter, as geopolitical and economic uncertainties led investors to shy away from riskier bets.
CAC 40 Technical Analysis: Daily Chart
In the daily charts, CAC 40 was trading in down channel. CAC 40 is currently trading above 20 days SMA & below 50 and 100 days SMA.
RSI is in buying zone which indicates bullishness. MACD is currently above zero which indicates bullishness.
Its immediate support is 5913.70 & the resistance level is at 6050.00.
CAC 40 INDEX was trading in down channel before there is breakout upside.
How to Trade CAC 40 INDEX this Week:
CAC 40 INDEX will follow the uptrend until there is trend reversal. So, remain bullish on CAC 40 INDEX.
