European stock markets end higher as investors confident about prospect of rate cuts

(MENAFN- Gulf Times) Stock markets in Europe and the United States pushed higher yesterday as investors remained confident about the prospect of interest rate cuts.
In Europe, investors focused on the likelihood the ECB will move forward with measures to boost the Economy at its next meeting in September, despite the fact that in his comments on Thursday ECB chief Mario Draghi was less dovish — or open to an easing of monetary policy — than expected.
'The prospect of a rate cut in September is still on the table and traders are snapping up relatively cheap stocks, said CMC Markets analyst David Madden.
'Yesterday acted as a speed bump, and today dealers are reshaping their outlook, which remains broadly positive, he added.
The European single currency had briefly sunk on Thursday to $1.1102 — the lowest level since May 2017 — after the ECB signalled it could undertake new stimulus measures and cut rates to boost flagging growth and inflation in Europe.
But it then snapped higher after Draghi left some traders feeling disappointed by the lack of any immediate action and the tone of his comment.
In trading on Friday, the euro resumed sliding, while it stayed considerably above $1.1102.
Frankfurt stocks finished the day 0.5% higher and Paris 0.6%.
London climbed 0.8%, with the weaker pound a plus for companies listed there that report their earnings in other currencies.
Wall Street shrugged off data that showed the US economy slowed sharply in the second quarter, with Google parent Alphabet, Starbucks and Intel posting good earnings reports after trading ended on Thursday.
Data showed the US economy grew at an annual rate of 2.1%, compared to the 3.1% rate it grew at in the first quarter.
Moreover 2018 GDP growth was revised down to 2.5%.
But the second quarter growth was higher than forecast by many economists, and Briefing.com analyst Patrick O'Hare pointed to strong consumer spending, with personal consumption expenditures rising by 4.3%.
'The key takeaway from the report is that it revealed some impressive strength in the US consumer, he said, adding this type of data could lead one member of the US Federal Reserve to dissent on cutting interest rates when it meets next week.
'That point notwithstanding, it won't deter the Fed from cutting the target range for the fed funds rate by 25 basis points, but it may very well have taken the prospect of a 50-basis points cut off the table, said O'Hare.
The Dow was up marginally in late morning trade, with the broader S & P 500 and tech-heavy NASDAQ indices both posting bigger gains.
American stocks have struck record highs in recent weeks on expectations that the Federal Reserve will cut interest rates next week.
But strong American economic data, including Thursday's report showing an increase in durable goods sales in June, had investors fearing a less dovish Fed announcement and led to a dip
In London, the FTSE 100 closed up 0.8% to 7,549.06 points; Frankfurt — DAX 30 ended up 0.5% to 12,419.90 points; and Paris — CAC 40 closed up 0.6% to 5,610.05 points yesterday.

MENAFN2607201900670000ID1098810198