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  • European stocks hit record highs on Thursday as investor optimism grew around a global stimulus-led economic recovery
  • The pan-European STOXX 600 index rose 0.58 per cent to 436.86 from the previous day’s close of 434.32
  • U.S. Federal Reserve officials remain cautious about the ongoing risks of the pandemic and said they are committed to bolstering the economy until its recovery is more certain
  • Holland-based technology investor Prosus NV rose slightly after it sold a two per cent stake in China’s Tencent Holdings for US$14.7 billion (roughly A$19.24 billion)
  • Meanwhile, chemicals maker Johnson Matthey gained 1.5 per cent after it forecast annual profits at the higher end of market expectations

European stocks hit record highs on Thursday as investor optimism grew around a global stimulus-led economic recovery and the U.S. Federal Reserve suggested it was in no hurry to tighten its monetary policy.

The pan-European STOXX 600 index rose 0.58 per cent to 436.86 from the previous day’s close of 434.32, adding to gains posted earlier this week after it erased all of its pandemic-driven losses.

According to details of the central bank’s latest policy meeting released on Wednesday, officials remain cautious about the ongoing risks of the pandemic and said they are committed to bolstering the economy until its recovery is more certain.

“A dovish set of meeting minutes from the Federal Reserve has further reassured investors that Jay Powell and the gang won’t be turning off the stimulus taps any time soon,” said Connor Campbell, an analyst at Spreadex.

At a meeting last month, European Central Bank policymakers threw around the idea of a smaller increase in bond purchases, ultimately agreeing to front-load the buying this quarter on the condition that it could be cut later if necessary.

According to Mark Haefele, chief investment officer of global wealth management at UBS, European economies are holding up well despite a third wave of the pandemic.

“With more vaccines becoming available from Q2, which should allow a sustainable reopening, we continue to expect a sharp rebound in the latter half of 2021, supported by high levels of savings, pent-up demand, and accommodative monetary and fiscal policy,” he said.

Investors have so far appeared largely unfazed by news that several European countries have put restrictions on the use of AstraZeneca’s vaccine, after a link was found to very rare blood clots.

Holland-based technology investor Prosus NV rose slightly during trading after it sold a two per cent stake — or 191.89 million shares — in China’s Tencent Holdings for US$14.7 billion (roughly A$19.24 billion) in the world’s largest-ever block trade, reducing its overall interest to 28.9 per cent.

“The proceeds of the sale will increase our financial flexibility, enabling us to invest in the significant growth potential we see across the group, as well as in our own stock,” said Bob van Dijk, Chief Executive of Prosus.

Meanwhile, chemicals maker Johnson Matthey gained 1.5 per cent after it forecast annual profits at the higher end of market expectations and unveiled a strategic review of its health business.

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