Europe open: Shares rally as investors eye central bank moves
By Frank Prenesti
Date: Tuesday 03 May 2022
(Sharecast News) - European markets edged ahead at the open on Tuesday after losses in the previous session as Australia raised interest rates for the first time in more than a decade and investors monitor key monetary policy decisions around the world.
The pan-European Stoxx 600 index climbed 0.5% in early deals as momentum from a Wall Street rally overnight boosted sentiment.
Investors were also eyeing monetary policy decisions from major central banks, with the US Federal Reserve expected to announce a half-percentage point increase to its benchmark interest rate on Wednesday.
Banks are taking more aggressive stances to combat soaring inflation.
Australia on Tuesday hiked its interest rate for the first time in more than a decade as consumer prices surge.
"The decision by the Reserve Bank of Australia to lift its key interest rate a notch more than expected highlights the growing consensus among central banks that much tougher action is needed to rein in soaring inflation which is causing such a headache for economies," said Hargreaves Lansdown analyst Susannah Streeter.
"With wage growth also picking up steam along with consumer prices, the signs and signals are coming thick and fast that more hikes should be expected."
In equity news, shares in UK energy giant BP rose as the company reported better-than-expected underlying first-quarter profits despite booking a $23bn writedown on its exit from Russia after Moscow's unprovoked invasion of Ukraine.
Portuguese energy company Galp slid 5.2% after its results.
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