Markets recap: Risk-on sentiment returns amid optimism over rate cuts

Global stock markets are on track for a positive close this week, buoyed by continued dip-buying following the intense selloffs at the beginning of August.

Risk-on sentiment has resumed amid positive economic data worldwide, easing recessionary concerns.

Cooler-than-expected inflation data from the UK and the US have also reinforced expectations for a lower-rate environment. 

European stock markets experienced a broad rally this week, with the Euro Stoxx 600 up by 2.47%, the CAC 40 rising by 2.11%, the DAX advancing by 2.60%, and the FTSE 100 climbing 2.19% over the past five trading days.

All sectors in the Euro Stoxx 600 ended the week in positive territory, with technology and healthcare stocks leading the gains, up 3.76% and 3.75%, respectively.

Basic materials, mainly mining stocks, underperformed but still rose by nearly 1% over the five-day trading period.

Notably, large-cap stocks saw sharp rebounds, with Novo Nordisk up 11.5%, LVMH rising 4.54%, and ASML jumping 7% from last week.

Conversely, Rio Tinto slid 2.74% due to declining iron ore prices amid the ongoing sluggish Chinese housing market.

UBS reported second-quarter earnings that exceeded expectations, driven by accelerated growth in its wealth management revenue, largely due to the Credit Suisse takeover.

The Swiss banking giant’s shares jumped 5.9% on Wednesday following the results and were up by 7.3% for the week.

On the economic front, the Eurozone’s economy grew by 0.3% in the second quarter, matching the first estimate, according to Eurostat's second estimate.

France, Spain, Belgium, and Italy all saw positive growth in the second quarter.

Additionally, the Paris Olympics is expected to boost the French economy in the third quarter, according to the Bank