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May 10 Reuters Europe39;s benchmark stock index hit a record high on Friday, on track for its biggest weekly gain since late January, as risk appetite was bolstered by growing bets of interest rate cuts in the region and a strong earnings season.

The panEuropean STOXX 600 climbed 0.8, as of 0830 GMT, with Germany39;s benchmark index also touching a record high.

European shares have reclaimed their recordbreaking rally, with the STOXX 600 eyeing a 3 weekly gain, after investors took a breather in April. The euphoria around artificial intelligence and monetary policy easing, among others, had sparked bumper gains in the region39;s stocks since late 2023.

An improved macro backdrop should be supportive for the European equity market… valuations remain very reasonable and perhaps there39;s still some room for them to expand, said Thomas McGarrity, head of equities, RBC Wealth Management in the British Isles.

Underscoring Europe39;s divergence from the U.S. Federal Reserve and boosting equities, the Bank of England hinted at summer rate cuts and Sweden39;s Riksbank delivered its first cut since 2016 earlier this week. Meanwhile, the European Central Bank in its latest policy meeting signalled a June rate cut.

RBC39;s McGarrity expects both the ECB and the BoE to cut rates three…