European stocks hit a fresh record high on the last trading day of May, tracking a mostly positive session in Asia and gains on Wall Street as economic optimism continues to override inflation concerns.

Friday’s session saw the Stoxx Europe 600 SXXP, +0.44% rise 0.4% to 448.40, reaching a fresh intraday record of 448.55, after Thursday’s modestly higher finish that sent it to a record close of 446.44. For the month so far, the index is up 2.8%. The German DAX DAX, +0.52%, the French CAC 40 PX1, +0.42%, and the FTSE 100 UKX, +0.24% all gained 0.4%.

The Nikkei 225 index NIK, +2.10% closed up 2.1%, though Chinese stocks 000300, -0.32% fell 0.3%. U.S. stock futures ES00, +0.35% were higher, led by a more-than 100-point gain for Dow futures YM00, +0.56%. Equities finished mostly higher on Thursday, boosted by positive economic data.

Investors are waiting for an update on the personal-consumption expenditures price index, the Federal Reserve’s preferred gauge of inflation. Investors are concerned that persistent price pressures could prompt the Fed to pull back on its accommodative policy, despite reassurances from the central bank that it’s in no hurry to do that.

But as inflationary pressures “bubble under the surface,” investors have been trying to prepare for all eventualities, flipping into value stocks that are geared at economic recoveries and out of growth stocks, said Richard Hunter, head of markets at Interactive Investor, in a note to clients.

“The renewed consideration of cyclical stocks as an investment destination has generally played into the hands of the FTSE 100, which has now risen by 9% in the year to date. The index is replete with sectors falling into the recovery category, such as the banks, oils and miners,” said Hunter.

Also in focus, President Joe Biden is expected on Friday to propose a $6 trillion budget for the coming fiscal year that would boost spending on infrastructure, education, healthcare and social services.

U.S. markets will be closed on Monday for the Memorial Day holiday, which also marks the start of traditional summer vacations. The U.K. will also observe a bank holiday on that same day, with those markets closed.

Among European stocks on the move, shares of banking giant HSBC HSBC, +1.36% HSBA, +2.30% climbed more than 2%, with industrial conglomerate Siemens SIE, +3.66% jumping nearly 4%.

Read: U.S. investors are pouring money into European stock funds

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