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Europe close: Stocks eye positive close to a volatile month of May

By Alexander Bueso

Date: Friday 27 May 2022

Europe close: Stocks eye positive close to a volatile month of May

(Sharecast News) - European shares extended gains on Friday on the back of a Wall Street rally and positive closes in Asia as investors became more comfortable with central bank efforts to tackle inflation.
The pan-European Stoxx 600 index rose 1.42% to finish at 443.93, with all major bourses in positive territory and registering similar-sized gains aside from Italy's FTSE Mib.

Month-to-date, the picture was slightly different, with all the main regional indices higher save for the French Cac-40.

Euro/dollar meanwhile drifted 0.09% lower to 1.0715, having hit technical resistance at its 50-day moving average in morning trading.

AJ Bell financial analyst Danni Hewson said investors "feel a little happier that they know where things are going to go, and also that there's going to be a real focus from central banks to make sure that they do take a measured approach [...] to create this soft landing to prevent economies from going into recession".

IG chief market analyst Chris Beauchamp however was more cautious.

"Stocks on both sides of the Atlantic seem content to push higher for the time being, but this isn't a return to the old ways of steady gains" Beauchamp said.

"A gain of even 10% from here might look like an all-clear signal for investors, but growth and earnings forecasts probably need to come down a bit more, which in turn points towards fresh lows for the market in the months to come."

On a slow day of equity news, shares in Auto1 Group dipped after the online car-selling platform was downgraded to 'sell' from 'neutral' by JP Morgan.


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