European stocks capped the best quarterly performance in a year, with investors now expecting the rally to broaden beyond the biggest companies in the region on optimism about interest rate cuts and economic growth.
“The real catalyst for the second quarter will be for inflation to continue to go down and for central banks to actually cut rates in June, because if that doesn’t happen, that would be quite negative,” said Arnaud Cayla, deputy chief executive at Cholet Dupont Asset Management. “Trading is based on a perfect scenario so there’s no room for error,” he said.
The pan-European STOXX 600 ended 0.2 per cent up, closing a week that was marked by four rangebound sessions ahead of a holiday extended weekend. The benchmark index finished its second straight quarter of gains with a 7 per cent rise, fuelled by optimism around imminent interest rate cuts and a rally in technology stocks on the back of artificial intelligence fervour.slumped 63.
The company said trading was tough at the moment, but that it expects conditions to improve later this year.