Norway’s central bank raises interest rates to curb inflation; European stocks edge higher
European stock markets opened with a slight uptick on Thursday as investors eagerly anticipate news of potential progress towards ending the conflict between Washington and Tehran.
In early morning trading, the pan-European Stoxx 600 index hovered just above the flatline. London’s FTSE 100 declined by 0.25%, while France’s Cac 40 and Germany’s Dax saw increases of 0.2% and 0.3% respectively.
On Wednesday, Norway’s central bank raised interest rates by 25 basis points to 4.25%, becoming the first major central bank to do so since the resurgence of tensions in Iran raised concerns about global inflation.
Norges governor Ida Wolden Bache stated, “Inflation has been persistently high and above target for several years.”
Asian markets’ movements influenced European shares as President Donald Trump hinted at an uncertain outcome regarding the potential agreement between the U.S. and Iran. Trump’s remarks about possible military action if Iran does not comply further added to the market suspense.
Meanwhile, in the midst of these developments, Israel carried out airstrikes in Lebanon, marking the first such action since the recent ceasefire with Hezbollah.
Japan’s Nikkei 225 stood out with a significant 5% increase, reaching 62,000 for the first time. Additionally, millions in the UK are heading to the polls for local elections, providing a comprehensive snapshot of public sentiment.
In corporate news, energy giant Shell reported better-than-expected first-quarter profits driven by surging energy prices amidst the Iran conflict.
Shell’s adjusted earnings for the quarter were $6.92 billion, surpassing analyst estimates. However, the company’s shares opened 2.8% lower due to adjustments in its share buyback plans.
Shipping company Maersk also disclosed its first-quarter earnings, which were slightly lower than the previous year but in line with expectations. Maersk’s CEO highlighted the challenges posed by the ongoing conflict in Iran.
Despite these market dynamics, the bond market in the UK is bracing for potential disruptions as the country navigates through its election period.
