London’s FTSE 100 added 0.3 per cent and Germany’s Xetra Dax rose 0.2 per cent, following a mixed session in Asia and with US markets closed for a holiday.European equity markets kicked off Monday’s session on a muted note, following the sharpest weekly decline for global stocks since the pandemic-driven ructions of March 2020.
The FTSE All-World index, a gauge of emerging and developed market equities, had dropped by the most since March 2020 last week, with a 5.7 per cent fall. US equities also suffered their heaviest weekly fall since the outbreak of the coronavirus pandemic. “I think we are in between two corrections on global stocks,” said Francesco Sandrini, head of multi-asset strategies at Amundi.“The first 20 per cent of the equity market collapse was because of valuations,” he said, referring to how higher interest rates lower the net present value of companies’ future profits in investors’ models.
Mr Powell will testify to Congress on Wednesday and Thursday after the world’s most influential central bank raised its main interest rate by 0.75 percentage points last week — its first rise of such magnitude since 1994.