European shares hit six-week highs after Fed spurs rate cut hopes

European shares hit six-week highs after Fed spurs rate cut hopes
FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, June 18, 2019. REUTERS/Staff -
Copyright
STAFF(Reuters)
Text size Aa Aa

(Reuters) – European stocks rose to six-week highs in early deals on Thursday, as signs Brussels will hold off on disciplinary action over Italy’s budget added to the latest signals of monetary stimulus on the way from the world’s big central banks.

The Federal Reserve pointed the way to a cut in interest rates as soon as July on Wednesday, following up on a surprisingly strong warning from European Central Bank chief Mario Draghi earlier this week that more action was possible.

Euro zone and German bond yields tumbled and the pan-European STOXX 600 index rose 0.6% by 0706 GMT, with interest rate sensitive banking stocks underperforming.

Adding pressure to the banking sector, Deutsche Bank AG slipped 0.6% after a report U.S. federal authorities are investigating whether the German lender complied with laws meant to stop money laundering and other crimes.

Italy’s FTSEMIB rose 0.72% and its banking index gained 0.43% after officials said the European Commission was unlikely to recommend further steps next week in disciplinary procedures over the country’s rising debt.

Germany’s DAX hit its highest level since May 3, helped by software company SAP advancing 1.5% after arch-rival Oracle forecast current-quarter profit above estimates.

(Reporting by Amy Caren Daniel and Medha Singh in Bengaluru; editing by Patrick Graham)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.