Europe midday: Shares, gold rise on Fed bets; Worldline tanks
European shares opened higher on Friday as the betting increased on a larger-than-expected US interest rate cut in US, a day after the European Central Bank trimmed its benchmark, while gold prices were also driven to a record high.
The pan-regional Stoxx 600 index was up 0.47% to 514.50 with all major bourses higher. Former head of the New York Federal Reserve Bill Dudley said there was a “strong case” for a 50 basis point cut.
On Thursday the European Central Bank cut rates as expected - its second of the year – by 25 basis points and bringing its key rate to 3.5%.
"In mainland Europe, there is a general feeling of hope that we are on a positive trajectory after the declines seen over the past two-weeks. Yesterday’s rate cut from the ECB came alongside fresh growth downgrades across the board, highlighting the banks need to intervene in a bid to kick start output in the region," said Scope Markets analyst Joshua Mahony.
"Gold prices have hit a fresh high in early trade today, with precious metals gaining traction once again. The strength seen for gold has finally started to feed through into the more volatile price of silver, which has gained an impressive 8% over the course of this week alone."
"With central banks finally pivoting towards a period of monetary easing, the gains seen throughout precious metals looks likely to continue as we move forward."
In equity news, shares in Stellantis were up even as the automaker said it was suspending production of electric Fiat 500 model on weak demand.
Vodafone gained despite Britain’s competition regulator ruling that its planned £15bn merger with Three would lead to higher prices for customers.
French payment group Worldline slumped by a fifth after the company announced the departure of its chief executive Gilles Grapinet and cut its 2024 revenue and core earnings guidance.
Reporting by Frank Prenesti for Sharecast.com