European stocks hit record highs as Eurozone inflation falls
(MENAFN) European shares surged to all-time highs on Friday, capping a volatile month with a notable rally, driven by a significant drop in euro zone inflation. The pan-European STOXX 600 index ended the day 0.1 percent higher, closing above 525 points for the first time and peaking at 526.66 points during trading. This increase marks a 1.2 percent gain for August, reflecting a second consecutive monthly rise. The positive movement in the Stock market was bolstered by preliminary data from Eurostat, which revealed that inflation in the euro zone had decreased to 2.2 percent in August. This represents the slowest rate since July 2021 and brings it closer to the European Central Bank's target of 2 percent. The easing inflation has strengthened expectations that the ECB will implement a rate cut in its upcoming September meeting.
Additionally, the favorable inflation data in the U.S. contributed to the positive market sentiment, with investors anticipating a potential interest rate cut by the Federal Reserve next month. Among the sectors, the real estate sector led the gains with a 1.4 percent increase, reflecting its sensitivity to interest rate changes. The banking index also saw a rise of 0.8 percent. Overall, the easing of inflation pressures in both the euro zone and the U.S. has created an optimistic outlook for future economic policies, driving European markets to new heights.
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