European stocks up after Hong Kong surge

<p>Investors also focused on the US Fed minutes and Greece.</p>

European stocks traded higher today (April 9th) as investors focused in the Federal Reserve policy and a surge in Hong Kong.

The FTSE Eurofirst 300 was up 0.8 per cent in early afternoon, on course for its best close since July 2007, while the broader Stoxx 600 was also up 0.8 per cent to a record 407.8. 

Traders are speculating about when the US Fed may start raising interest rates after minutes of the central bank’s March meeting released yesterday showed policymakers were split about the right timing for an interest rate hike. 

"We can conclude that most [Fed members] believe the second half of this year is the appropriate timing for lift-off," Bank of Tokyo-Mitsubishi UFJ told the Financial Times.

Surge in Hong Kong

"That is exactly the thinking of the market now with the probability of a June rate increase now close to zero per cent with one full increase nearly in the price by December."

Sentiment was further boosted by a surge in Hong Kong, which rocketed for a second consecutive day as investors seek to capitalise on the Stock Connect scheme with Shanghai.

The Hang Seng Index closed up 2.7 per cent at 26,944.39, after a 3.80 per cent hike yesterday. Stocks in Hong Kong could go higher, Credit Suisse told MarketWatch, given that the Hang Seng Index is still a "fair value" at 11 times price-to-earnings.

Investors are also focusing on the Greek situation. The eurozone said only six working days are left for Greece to come up with a revised list of reforms.

Eurozone deputy finance ministers want an agreement on the €7.2 billion loan before a Eurogroup meeting on April 24th.

This comes after the Greek government asked Germany for €278.7 billion (£204 billion) in war reparations for the Nazi occupation during World War II, ahead of a €450 million loan repayment due to the International Monetary Fund (IMF) today.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.