A powerful and defiant wave of optimism has swept across European markets at the open on Thursday, with stocks surging as investors brazenly shrug off the political chaos of a US government shutdown.
The investors have instead choose to focus on a potent cocktail of strong corporate earnings and the promise of an imminent interest rate cut.
The buying was immediate and broad-based.
The pan-European Stoxx 600 jumped 0.6 percent within the first 10 minutes of the session, with the heavyweight autos and technology sectors leading the charge, soaring 2.1 percent and 2.3 percent respectively.
This bullish conviction is a direct extension of a powerful rally that has crossed the Pacific from a record-setting Wall Street.
A paradoxical rally: the shutdown as a silver lining
The market’s primary focus remains fixed on the US government shutdown, but in a paradoxical twist, investors are viewing the political impasse not as a risk, but as a catalyst.
The shutdown has delayed key economic data, clouding the outlook for the Federal Reserve and making an interest rate cut at its October 28-29 meeting all but a certainty.
This prospect of easier money is providing a powerful and intoxicating tailwind for global equities.
This optimism follows a stunning session in Asia, where South Korea’s Kospi index had surged more than 3 percent to an all-time high, a rally ignited by a landmark deal between its local chip giants and the AI powerhouse OpenAI.
A chorus of corporate confidence
Against this bullish global backdrop, a series of strong local corporate news is adding fuel to the fire. British grocery titan Tesco reported better-than-expected first-half earnings on Thursday and confidently raised its guidance for the full year.
The company now expects its adjusted operating profit to fall in the range of £2.9 billion and £3.1 billion, a significant upgrade from its previous forecast.
The market reacted with immediate approval, sending Tesco’s shares up 1.4 percent in early trade.
The positive sentiment was so strong that even a negative note from an investment bank failed to dent the mood.
After Deutsche Bank lowered its price target for the Danish jewelry giant Pandora, citing the sharp rise in the cost of silver, the company’s shares still managed to climb 1.1 percent, a clear sign that, for now, the bulls are firmly in control.
The post Europe markets open: Stoxx 600 jumps 0.6%, led by a tech and auto rally appeared first on Invezz
