Title: European Stocks Soar Ahead of ECB, BOE Meetings; BooHoo Cuts Guidance
Dec 16, 2021 03:44AM ET
European stock markets rose significantly on Thursday. Investors reacted positively to the Federal Reserve's measures to fight inflation before the European Central Bank and the Bank of England made their decisions.
At 3:45 AM ET (0845 GMT), Germany's DAX was trading 1.8% higher, France's CAC 40 was up 1.5%, and the UK's FTSE 100 climbed 1.1%.
The gains followed the US Federal Reserve's announcement late on Wednesday that it would accelerate the unwinding of its bond-buying program and raise interest rates by three-quarter points by 2022.
This suggests that Fed policymakers believe the US economy is strong enough to handle both the omicron version of COVID-19 and a tightening of monetary policy to combat high inflation.
Both the European Central Bank and the Bank of England have had to strike a balance between the need to support economies threatened by the COVID-19 virus and the desire to combat inflationary pressures.
In corporate news, Boohoo shares slumped more than 15% to a 5-year low after the UK online fashion retailer cut its forecasts for the 2021-22 financial year, citing disruptions to international shipments and pandemic-related cost increases.
EDF shares fell nearly 9% after the French energy company announced it had shut down a second nuclear power plant due to safety issues. This closure represents about 10% of reactor capacity at a time when Europe is crying out for more energy, and could reduce the company's expected EBITDA by over €200 million this year.
Telecom Italia shares fell 0.6% after the Italian phone company issued its third profit warning in a year as it faces a takeover bid from US fund KKR.