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European stock exchanges soar on Friday and during week

Relevance up to 09:00 2022-03-14 UTC–4

Yesterday, major European indicators reported strong growth amid weakening geopolitical worries.

The UK’s FTSE 100 rose by 0.8% to 7155.64, the French CAC 40 gained 0.85% and increased by 6260.25, and the German DAX added 1.38% to 13628.11.

At the same time, European stock indices also closed this week strongly positive after a major drop over the previous week.

On Friday, investors focused their attention on an announcement by Russian President Vladimir Putin at a meeting with his Belarusian counterpart, Alexander Lukashenko, about certain positive developments in the negotiations with Ukraine.

Putin’s statement about some progress in the conflict resolution between the countries was enough for the world markets to start a spectacular rally. At the same time, analysts are confident that today it is too early to draw any conclusions, as there are still no signs of a real settlement between Russia and Ukraine.

In addition, at the beginning of yesterday’s trading session, European stock exchange indicators were showing barely noticeable growth. Market participants were analyzing the results of the European Central Bank meeting, the latest inflation reports, and news about the conflict in Ukraine.

According to data from the Federal Statistical Office of Germany, the inflation rate in the country soared to 5.5% last month from 5.1% in January. In month-on-month terms, the value was 0.9%, the same as in January 2022.

Meanwhile, the European Central Bank predictably kept its benchmark interest rate at zero and the deposit rate at -0.5% at the end of its March meeting.

At the same time, the Central Bank has adjusted the buyback of financial assets within the framework of the APP. In April, the regulator will buy back assets for 40 billion euros, in May – for 30 billion euros, and in June – for 20 billion euros.

At the same time, the ECB worsened its forecast of economic recovery in the euro area in 2022 to 3.7% from the previously projected 4.2%.

Analysts suggest that traders remained disappointed by the lack of response from the European Central Bank to the geopolitical disaster in eastern Europe. Throughout the conflict between Russia and Ukraine, the West has permanently imposed sanctions on Russia. On Tuesday, US President Joe Biden banned imports of oil products from Russia. Major global corporations have partially or completely suspended their activities in the country, despite the prospect of declining profits.

Earlier, economists of one of the world’s largest investment banks Goldman Sachs worsened the GDP forecast for 19 eurozone countries for 2022 to 2.5% from 3.9%. The bank representatives explained their decision by the negative impact of the conflict between Russia and Ukraine, the winding down of economic stimuli, rising prices of energy and raw materials, as well as the undermining of international trade.

Meanwhile, the volume of industrial production in the UK rose by 2.3% year-on-year in January after increasing by 0.4% in December 2021. At the same time, analysts had forecast a 1.9% rise in the index.

In January 2022, the UK economy grew by 0.8% compared to December of last year, against an increase of 0.2% anticipated by experts.

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