European Stock Market Shows Confusion

European stocks might be ending the week on mixed notes. Friday morning the significant European stocks showed mixed prices influenced by investors’ mixed sentiments wrapping their minds around the continuous rate hike by the U.S Federal Authorities.

Germany’s DAX futures contracts were sold at 0.3% lower. Similarly, France’s CAC 40 traded at a low of 0.3% while UK’s FTSE 100 traded at a high of 0.2%.

Investors have been highly influenced by the continuous Fed Reserve rate hike, moreover, the European central bank follows pursuit with its 75 bps increase in borrowing costs. As a result of these rate hikes, investors tend to lose their investing appetite pushing the European equities down low.

Other global central banks have also seemed to be following in the footsteps of the U.S Fed Reserve, the Bank of England Swiss National Bank and the Norges Bank of Norway have signaled to increase their borrowing costs. These attempts are being made in an effort to tame inflation which however will lead to a recession.

According to HSBC analysts, investors must proceed with caution while purchasing European equities because of the cheaper valuations and interest rates. Nonetheless, there are chances for UK’s market to grow based on new budget updates from the new finance minister Kwasi Kwarteng. The budget updates referred to as the “mini Budget” will be set as an effort to support the country through its difficult winter.

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