Europe close: Stocks stage bounce, periphery stocks lead
By Alexander Bueso
Date: Tuesday 03 May 2022
(Sharecast News) - European markets staged a partial rebound following the heavy losses seen during the previous session even as Australia raised interest rates for the first time in more than a decade and investors bid their time ahead of key monetary policy decisions around the world scheduled for later in the week.
The pan-European Stoxx 600 index was 0.53% higher at 446.20 as momentum from a Wall Street rally overnight boosted sentiment. Germany's Dax added 0.72% alongside to 14,039.47 while the FTSE Mib climbed 1.61% to 24,242.25.
In the next background, the US Federal Reserve was expected to announce a half-percentage point increase to its benchmark interest rate on the following day and traders had already factored in half point moves for the subsequent three policy meetings.
Central banks were generally taking more aggressive stances to combat soaring inflation.
A case in point, 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 jumped 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 slipped 1% after its results.
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