European stocks experienced a robust start to the week, closing substantially higher as investors evaluated prospects for global interest rates and credit risks within the Eurozone. The Eurozone's STOXX 50 index increased by 0.9% to 5,438, while the STOXX 600 climbed 0.4% to reach 557. There is widespread anticipation that the Federal Reserve will proceed with further interest rate cuts, likely implementing a 25 basis point reduction. Additionally, market participants are keenly awaiting policy announcements from the Bank of England, the Bank of Japan, and the Bank of Canada.
In other developments, focus remains on France and its impending budget deficits after Fitch Ratings downgraded the country's credit rating, attributing the decision to escalating government debt and increasing political polarization. The luxury sector received a boost after JPMorgan highlighted significant growth potential within the industry, just as speculation mounted regarding a potential acquisition of Armani by a larger conglomerate. LVMH shares rose nearly 3%, and Kering saw a gain of over 5.5%. Concurrently, Rubis shares skyrocketed 7.7% amid reports suggesting takeover interest from CVC Capital Partners and Trafigura.
