European Stocks Hit New Record Highs Supported by Lower Inflation Risks
European stock indexes rose for the fifth consecutive session on Wednesday (June 17th), hitting new records, supported by easing inflation risks. The Euro STOXX 50 rose 0.6% to 6,297, while the STOXX Europe 600 gained 0.5% to 639.
Market sentiment improved after Iran and the US remained committed to signing a deal on Friday. The deal is expected to restore energy trade from the Middle East and help ease energy price pressures.
European government bond yields also fell again as energy prices weakened. This reduced expectations that the European Central Bank would need to raise interest rates this year to address inflationary pressures.
The banking sector again led the gains due to an improving credit outlook. Santander, UniCredit, and Deutsche Bank each rose around 2.5%, indicating that investors still view the financial sector as a beneficiary of more stable risk sentiment.
However, not all sectors moved positively. BMW shares fell more than 6% after the automaker cut its performance guidance, citing worsening market conditions in China and the broader impact of the Middle East conflict.
The market's next focus will be on the signing of the US-Iran deal, the direction of energy prices, and the ECB's response to inflation. As long as energy pressures continue to ease, European stocks have the potential to remain supported, although risks in certain sectors, such as automotive, still need to be monitored.
Source: Newsmaker.id
