The recovery of hopes, supported by the interest rate cut, boosts European stocks in the last week of 2023

In a holiday-shortened week, European stocks rose today, supported by renewed hope for a U.S. interest rate cut in early March. However, shipping company stocks declined due to news of the resumption of travel through the Suez Canal and the Red Sea.

The European Stoxx 600 index closed up by 0.3 percent. According to Reuters, the interest rate-sensitive technology sector, including major chip manufacturing companies in Europe, rose by 0.7 percent. Real estate stocks also increased by 0.8 percent.

However, gains were offset by a 4.7 percent drop in shares of the Danish company Maersk, as it outlined schedules for dozens of ships to pass through the Suez Canal in the coming days. This is seen as a sign of global shipping companies returning to the Red Sea routes after a halt earlier this month.

Shares of other shipping companies such as Hapag-Lloyd, Frontline, and Höegh Autoliners fell between 1.3 and 8.2 percent. Trading volumes are expected to be light as traders return from the long Christmas holiday, with only a few trading days remaining in 2023.

The series of gains over the past seven weeks, pushing the Stoxx 600 index up by around 13 percent so far this year, have been driven by retail and technology companies performing the best among sectors.

Global markets have risen since mid-December after the Federal Reserve hinted at the possibility of a rate cut next year. However, the European Central Bank did not indicate similar expectations.