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Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

Europe midday: Shares surge on Fed cut signal as BoE holds rates again

(Sharecast News) - European shares held gains on Thursday as the US Federal Reserve signalled interest rate cuts in 2024, sparking a rally in equities, while the Bank of England held its benchmark at a 15-year high. The pan-European Stoxx 600 index was up 1.5% to 479 with all major bourses on the rise. In the US, the Dow Jones index closed at a record high as the Fed said it expected to cut rates three times next year after holding its benchmark steady in a range of 5.25% to 5.5%.

In London, the Bank of England left rates unchanged at 5.25% as widely expected. Investors now await the European Central Bank for its decision - also tipped to a 'hold'.

BoE policymakers were split on the decision, with three members of its Monetary Policy Committee pushing for a 25 basis point rise to 5.5%.

The MPC also warned that policy would need to be "sufficiently restrictive for sufficiently long" to return inflation to its 2% target sustainably in the medium term.

"As illustrated by the November Monetary Policy Report projections, the Committee continues to judge that monetary policy is likely to need to be restrictive for an extended period of time. Further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressures."

In equity news, AMS-Osram soared more than 10% after Jefferies upgraded the Austrian electronics company's stock to 'buy' from 'hold'.

Vivendi shares climbed 9% after the French media giant announced that it is considering breaking up into several listed entities.

Reporting by Frank Prenesti for Sharecast.com

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Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

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