(For a Reuters live blog about the US, UK and European stock markets, click LIVE / in a news window or type LIVE /.)
* Fed, ECB assurances support sentiment
* M&S hits 1 year high in early trading
* Danone slips on Berenberg downgrade (Adds comments, updates prices)
From Sruthi Shankar
May 26 (Reuters) – European stocks held near all-time highs on Wednesday as a host of central bank policymakers pledged to keep monetary policy loose despite recent signs of rising inflation.
The pan-European STOXX 600 index rose 0.2%, with gains in travel and leisure stocks offsetting bank losses.
Global equity markets were relieved as Federal Reserve officials reiterated a cautious stance on monetary policy after concerns over rising inflation fueled market volatility earlier this month.
Similar comments from European Central Bank policymakers, including the fact that it may be too early to discuss reducing emergency bond purchases, helped stabilize equity markets in the region.
“I think they will endeavor not to make the same mistake as they did last cycle. In 2011 they raised interest rates in front of the Fed as a precaution,” said Max Kettner, multi-asset strategist at HSBC Global Research.
“That was one reason for the slower growth in the eurozone throughout the cycle.” The STOXX 600 hit a record high on Tuesday after rising nearly 12% this year. This was aided by strong gains and optimism about reopening economies as the pace of COVID-19 vaccination accelerated.
“We were very risky at the beginning of 2021 and made our asset allocation a little cyclical just because we missed the next big catalyst on the macro side,” said Kettner.
However, European equities are likely to stay just above current record levels if the initial surge subsides. A Reuters poll of strategists predicted the STOXX 600 would hit 451 points by the end of the year, just 1.3% above Monday’s close of trading.
The story goes on
UK retailer Marks & Spencer rose 4.2% to a year-long high after announcing that it had traded well in the first few weeks of 2021-22 and that profits would rebound after seeing a slump in full-year earnings reported by 88%.
French food company Danone was down 1% after Berenberg downgraded its stock to “sell”, citing the hard-to-fix low-growth nature of most of its categories.
The Spire Healthcare Group rose 24.6% after Australian hospital operator Ramsay Health Care announced it was buying a British colleague for £ 1 billion ($ 1.42 billion). (Reporting by Sruthi Shankar in Bengaluru; editing by Arun Koyyur)