European markets rally as investors digest Fed decision; Stoxx 600 up 1.5%; Tech up 3%

The pan-European Stoxx 600 climbed 1.5% in early trade, with tech stocks surging 3% to lead gains as all sectors and major bourses started the day firmly in positive territory.

Global investors were digesting the U.S. central bank’s signal on Wednesday that it would be aggressive on tapering bond purchases and sees several rate hikes in 2022.

The Fed will begin reducing the pace of its asset purchases in January and buy just $60 billion of bonds each month going forward, compared to $90 billion in the month of December.

Projections released overnight indicate that Fed officials see as many as three rate hikes coming in 2022, with two in the following year and another two in 2024.

The decision to aggressively ease bond purchases follows recent inflation data showing a 6.8% surge in November, which was higher than expected and the fastest rate since 1982.

Asia-Pacific markets were mixed Thursday as investors assessed the Fed’s indications that its run of ultra-easy monetary policy since the start of the pandemic is coming to a close.

Meanwhile, U.S. stock futures were higher in early premarket trade on Thursday. More U.S. economic data is due out Thursday, including housing starts and jobless claims at 8:30 a.m. EST.

There’s more central bank activity on Thursday with the Bank of England set to release its latest monetary policy decision. U.K. inflation climbed to a 10-year high in November, data showed Wednesday, and could influence the bank on whether to tighten monetary policy.

The European Central Bank also announces its policy decision, having maintained a more dovish tone than its peers thus far.

Also in focus for European markets are flash purchasing manager’s index (PMI) data from across the euro zone and U.K. for December. The data will likely reflect the imposition of Covid restrictions and partial lockdowns in some countries, such as Germany and the Netherlands, respectively.

In terms of individual share price movement, Finnish software company QT Group gained 6.4% to lead the Stoxx 600 while at the bottom of the index, EDF shares plunged 8.6% after faults were found at one of its French nuclear power stations, leading the utility giant to cut its core profit goal for the year.

— CNBC’s Tanaya Macheel and Saheli Roy Choudhury contributed to this report.