European stocks hit record after dovish ECB comments

European stocks hit a new record high on Monday, after comments by the president of the European Central Bank, Christine Lagarde, helped to dismiss bets for a tighter monetary policy, although a fall in miners kept profits at bay.

The president of the central bank said that the current strong advance in inflation will be longer than anticipated, but will fade next year, so a monetary policy action now would affect the economy just as price growth begins to moderate itself.

The index Euro Stoxx 60, which measures the 600 most important broadcasters in the area, moved 0.40%, while the German benchmark DAX index gained 0.30%, with both reaching a new record. The French CAC 40 also hit an all-time high, rising 0.5% on a boost from Airbus.

The Euro Stoxx 600 has hit a series of all-time highs this month, as strong corporate earnings and dovish monetary policy decisions by central banks boosted investor sentiment despite a resurgence in fears of Covid-19 in the region.

“Comments from Central Bank Europe President Christine Lagarde highlighted the subdued attitude towards inflationary pressures, with its first rate hike still scheduled for 2023,” explained Joshua Mahony, IG’s senior market analyst.