Open to close after Fed quashes hawkish bets

LONDON — European markets are set to climb on Thursday, tracking global sentiment after the U.S. Federal Reserve doused speculation about more aggressive monetary tightening.

Britain’s FTSE 100 is set to gain around 87 points to 7,580, Germany’s DAX is expected to jump by around 315 points to 14,286 and France’s CAC 40 is seen around 139 points higher at 6,535.

The Fed on Wednesday raised its benchmark interest rate by half a percentage point, its biggest hike in two decades, as it looks to rein in inflation running at a 40-year high. The central bank will also begin reducing its balance sheet in June.

However, Chairman Jerome Powell ruled out more aggressive hikes in future policy meetings, prompting a relief rally on Wall Street as traders began backing the Fed to contain inflation without causing a recession.

U.S. stock futures were muted in early premarket trade on Thursday after the Dow surged more than 900 points during Wednesday’s regular trading session.

Shares in Asia-Pacific also advanced during Thursday trade following the Fed decision, with mainland Chinese stocks leading gains on their return to trade following several days of holidays.

Focus in Europe on Thursday will turn to the Bank of England, which is expected to announce a fourth consecutive interest rate hike to combat soaring prices.

The war in Ukraine also remains on investors’ radar. Russian forces have reportedly renewed their assault on the Azovstal steelworks complex, a last stronghold for Ukrainian fighters in the southern port city of Mariupol.

Meanwhile, the EU has proposed a gradual ban on Russian oil in its sixth round of sanctions against Moscow since the unprovoked invasion of Ukraine.

Corporate earnings continue to guide individual share price action in Europe. Shell, BMW, Leonardo, UniCredit, Intesa Sanpaolo, Banco BPM, Societe Generale, Credit Agricole, AXA, Stellantis and Air France KLM were among those reporting before the bell on Thursday.

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