Dax Up 2.54%; European Stocks Rally After Fed Rate Increase

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By Jacob Maslow

European stock markets have rallied on Thursday following the decision by the United States Federal Reserve to raise interest rates by 0.25%. Optimism over the strength of the United States economy has caused Germany’s DAX 30 to surge by 2.7%, France’s CAC 40 advanced 1.28%, and Euro Stoxx 50 is up 1.98% on the day.

The first interest rate increase since 2006, the Federal Reserve reaffirmed that future rate increases will occur gradually and be based on economic data. Investors were preparing for the interest rate increase for the last month, and the news that future increases will be data dependent has caused optimism in the markets.

European financial stocks were up higher on the day, with BNP Paribas (EPA:BNP) up 1.76%, Commerzbank (FRA:CBK) up 2.39%, and Germany’s Deutsche Bank (NYSE:DB) up 2.33% the day. Italian lenders also experienced gains, with Unicredit (CRDI) up 1.41% and Intesa Sanpaolo (ISP) up 1.4%.

Financial stocks in the EU have rallied all week, providing optimism that the European Union’s economy will continue to stabilize in the coming months.

London’s financial stocks also experienced gains on Thursday, with Lloyds Banking (LON:LLOY) up 1.19%, Barclays (LON:BARC) up 1.71%, and HSBC Holdings (LON:HSBA) surging up 2.36%.

Mining stocks are down on the day, with Fresnilo (LON:FRES) dropping 2.9% and Rio Tinto (LON:RIO) down 1.95%.

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