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Market Update
Source: Newsmaker.id
European stock markets edged higher on Monday (October 26), following a decline of more than 1% the previous week. The DAX rose 0.4%, the CAC 40 gained 0.6%, and the FTSE MIB added 0.5%, while the FTSE 100 fell 0.1%. Market sentiment was bolstered by a drop in oil prices, following efforts to reach an agreement aimed at easing tensions in the Middle East.
The correction in oil prices has provided some relief to European markets, which are heavily dependent on energy imports. Previously, Brent crude prices had surged 6.2% last week, driven by Houthi attacks on energy and transport infrastructure in Saudi Arabia. The recent decline in oil prices has helped alleviate concerns regarding regional inflationary pressures.
Nevertheless, investors remain cautious ahead of a series of central bank decisions due this week. Markets anticipate that the Federal Reserve, the European Central Bank (ECB), and the Bank of Japan will hold interest rates steady, while keeping the door open for future hikes in response to inflationary pressures fueled by energy costs. The market currently assigns an approximately 80% probability to a 25-basis-point interest rate hike by the Federal Reserve in December.
The European technology sector also remains in focus following a sell-off last week. Investors are awaiting earnings reports from Alphabet, Microsoft, and Amazon to gauge the outlook for capital expenditure on artificial intelligence (AI). The investment guidance provided by these companies will serve as a key indicator for European tech suppliers, such as ASML and ASM International.
Meanwhile, French assets received a modest boost after Moody’s opted not to downgrade the country’s sovereign debt rating. This development helped ease pressure on French government bonds, after the 10-year yield had briefly breached the 5% mark. Despite this, political uncertainty and budgetary concerns continue to weigh on investor sentiment toward the French market. (srh)
Source: Newsmaker.id