European stock markets experienced a significant upward movement midday Thursday, bolstered by a remarkable rise in technology stocks. This surge was catalyzed by the announcement from Micron Technology, a US-based memory-chip manufacturer, regarding its strong quarterly earnings and encouraging guidance.
This positive outcome has sparked renewed interest in AI-related investments across the continent. Tech and banking shares were the primary drivers of this rally in continental exchanges, while the oil sector lagged behind, reflecting broader market trends. Investors directed their attention towards Wall Street futures, which were reflecting green, indicating a positive shift.
Furthermore, Asian markets closed sharply higher after Beijing announced new fiscal stimulus measures, following recent monetary easing steps taken by the People's Bank of China. This response has been welcomed, as evidenced by the Hang Seng Index in Hong Kong, which concluded the day with a remarkable 4.2% increase.
In Switzerland, inflation rates remained modest, prompting the Swiss National Bank to reduce its benchmark deposit rate to 1% from 1.25%, with indications that further cuts could be possible in the future. The Stoxx Europe 600 Index, a key pan-continental benchmark, was up by 1% during mid-session trading. Diving deeper into sector performance, the Stoxx Europe 600 Technology Index surged 3.3%, while the Stoxx 600 Banks Index recorded a gain of 2%.
In contrast, the Stoxx Europe 600 Oil and Gas Index saw a decline of 2.8%. However, the Stoxx 600 Europe Food and Beverage Index showed a positive inclination, rising by 1.3%. On the REIT front, the REITE, which serves as a European Index of Real Estate Investment Trusts, posted a modest increase of 0.8%.
The Stoxx Europe 600 Retail Index also advanced, reflecting a 0.9% rise. Examining individual national markets, Germany's DAX was up 1.2%, while London’s FTSE 100 saw a more modest increase of 0.2%. The CAC 40 in Paris demonstrated considerable growth, rising by 1.6%, and Spain's IBEX 35 concluded the day with a gain of 1%.
In the bond market, yields on benchmark 10-year German bonds experienced a decrease, hovering near 2.14%. Traders also observed fluctuations in the oil market; front-month North Sea Brent crude-oil futures dipped by 2.5%, settling at $71.06 per barrel. This decline was attributed to reports suggesting that Saudi Arabia has abandoned its ambition for a $100 per barrel price target and is instead focusing on increasing production levels.
Additionally, discussions in Libya hint at potential agreements that could lead to increased crude output. The volatility index for Euro Stoxx 50 experienced a decrease of 1%, settling at 16.05. This decline signals below-average volatility for European stock markets over the next 30 days, providing a positive outlook.
A reading above 20 suggests market turbulence, while a reading below 20 conveys an environment of calmer exchanges..