European Shares Climb Amid Positive Market Signals and Fed Rate Cut

European shares experienced a third week of gains, tracking positive movement from Wall Street due to the Federal Reserve's interest rate cut and further cuts anticipated in 2026. The STOXX 600 index rose, and sectors such as banks, basic resources, and travel showed strong performance amidst evolving market dynamics.

European shares marked a third consecutive week of gains on Friday, riding on the optimism from Wall Street following the Federal Reserve's interest rate cut, with expectations of further reductions in 2026.

The pan-European STOXX 600 climbed 0.4% to 583.56, nearing a record high. Leading regional markets also surged, with Spain's IBEX up 0.8% and Germany's DAX advancing by 0.6%. Financial firms led the upward trend, with banks experiencing a 0.7% increase. UBS notably soared 4.4% after Swiss legislators reached an accord on new capital rules to maintain the bank's competitive edge globally.

Despite concerns about the high valuations of tech and AI sectors, investor sentiments remained buoyant. Basic resources stocks gained with record copper prices, supported by China's fiscal promises and the Fed's rate cut. Industrials and travel sectors also showed gains. This positive run comes ahead of the European Central Bank's pivotal final rate decision of the year amidst hints of a potential rate hike.

(With inputs from agencies.)