European stocks up amid markets rally

By Aysu Bicer

ANKARA (AA) - European stocks rallied on Tuesday as investors expect central banks to take a more dovish stance after most of them opted for rate hikes in fighting the inflation.

On Monday, the US stocks saw the largest daily rise since August, with the tech-heavy Nasdaq Composite up by 2.3%.

As ever-increasing inflation data kept coming from all around the world, the central banks of the UK, Norway, Switzerland, Taiwan, South Africa, Indonesia and the Philippines have made aggressive interest rate hikes recently.

Yet, the Reserve Bank of Australia raised the rates by 0.25 percentage points on Tuesday to 2.6%, below the market forecast -- a sign that central banks may reverse their aggressive monetary stance in the upcoming period.

Also, the British government has scrapped a proposed top rate tax cut of 45% on Monday after a week of economic turmoil in the country and the UK pound diving to a historic low against the US dollar.

This has eased the turmoil in the UK markets, with the pound rising 0.6% to $1.14.

STOXX Europe 600 indicator index rose by 1.54% to 396.8 points, while Germany's DAX 40 index gained 1.66% to 12,412.67 points.

The UK's FTSE 100 index increased by 1.16% to 6,989 points, while France's CAC 40 index went up by 1.75% to 5,895 points.

Spain's IBEX 35 index rose by 1.68% to 7,587 points, and Italy's MIB 30 index increased by 1.84% to 21,359.

The euro/dollar parity stands at 0.99010 as of 1036GMT, up 0.6% compared to previous session.