The Stoxx 600 index kicked off the week with a 0.6% increase, largely attributed to Israel’s measured military response in Gaza. This shift in attention has directed investors’ focus toward the Federal Reserve for clues on future interest rate moves. As a result, a risk-on sentiment prevailed, with most sectors trading positively. Concurrently, oil prices experienced a drop, reflecting the contained conflict in the Middle East.
Siemens Energy AG saw a surge in its shares after the company’s supervisory board chairman, Joe Kaeser, refuted claims that the turbine maker would require a government bailout. Ascential PLC also witnessed an increase in its shares following its proposal to sell Digital Commerce to Omnicom Group (NYSE:OMC) and WGSN to Apax Funds.
Despite announcing a $3 billion share buyback plan, shares of HSBC Holdings Plc (LON:HSBA) remained relatively unchanged. Concerns are growing over the potential impact of high interest rates and geopolitical issues on equities, fueled by disappointing regional earnings updates and downward earnings revisions.
Investors are keeping a close watch on the central bank decisions from the Federal Reserve, Bank of Japan, and Bank of England this week as they reevaluate recession estimates. Last week, ECB President Christine Lagarde emphasized that the euro area would continue to face pressure, despite an unprecedented campaign to raise borrowing costs.