European stocks surge on optimistic corporate expectations, Fed Chair Testimony

(MENAFN) European stocks ended Wednesday on a high note, buoyed by widespread gains and positive corporate forecasts, as investors closely monitored further remarks from U.S. Federal Reserve Chairman Jerome Powell during his second day of congressional testimony. The pan-European STOXX 600index saw a 0.9 percent increase, significantly driven by a notable 2.1 percent surge in real estate stocks. This broad market uplift was mirrored in France, where stocks also rose by approximately 0.9 percent, recovering from declines in the previous session. The market's reaction came as investors continued to evaluate the volatile political landscape following Sunday's legislative elections.

Chairman Powell, in his continued testimony before Congress, indicated that he was not yet convinced that inflation was sustainably moving towards the 2 percent target. However, he expressed "some confidence" regarding this trajectory. This cautious outlook from Powell has led markets to eagerly anticipate the upcoming June inflation data from the United States and Germany, set to be released on Thursday. The data will play a crucial role in determining the potential timing of an interest rate cut.

In the corporate sector, Norwegian aerospace and defense company Kongsberg Gruppen saw a remarkable 11 percent jump in its share price, leading the index. This surge was fueled by the company’s strong revenue growth, improved profit margins, and a growing order backlog reported for the second quarter. The positive performance of Kongsberg Gruppen highlights the broader trend of optimistic corporate outlooks that have contributed to the overall positive sentiment in the European stock markets.

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