DAX Rallies As Fed Rate Hike Fears Ease
(RTTNews) - German stocks rallied on Friday after two Federal Reserve officials backed another 0.75-percentage-point interest rate increase at the U.S. central bank's meeting later this month, helping ease worries about more aggressive rate hikes.
Italy's political chaos remained in focus after President Sergio Mattarella rejected Prime Minister Mario Draghi's resignation and asked him to address parliament next week to get a clearer picture of the political situation.
Draghi resigned after coalition party 5-Star Movement failed to back him in a confidence vote over his plan to combat soaring prices.
Also, the European Central Bank is due to meet next week amid Italy's political turmoil. The central bank is expected to raise interest rates by 25 bps, well short of the 75-bps that the Fed could now hike in July.
The benchmark DAX jumped 200 points, or 1.6 percent, to 12,719 after tumbling 1.9 percent the previous day.
Banks Commerzbank and Deutsche Bank were up 1.6 percent and 0.7 percent, respectively.
Automakers BMW and Volkswagen both rose about 3 percent despite European passenger car registrations declining for the twelfth successive month in June.
Registrations of new passenger cars decreased 15.4 percent year-over-year in June, faster than the 11.2 percent fall in May, as supply chain issues continue to hurt production, the European Automobile Manufacturers' Association said.
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