By Sruthi Shankar and Ankika Biswas

(Reuters) – European stocks reversed their initial losses to a five-week high on Wednesday after a lower-than-expected rate hike by the Bank of Canada fueled expectations that major central banks could take a less approach. aggressive than expected.

The pan-European STOXX 600 index closed up 0.66% at 410.31 points, its strongest since September 20.

Germany’s DAX index, France’s CAC 40 and Italy’s FTSE MIB all hit a six-week high.

Global stock markets gained ground after Canada’s central bank announced a lower-than-expected interest rate hike and said it was nearing the point where the hikes could end as it expected the the country’s economy could enter a mild recession.

All eyes are on the European Central Bank’s monetary policy meeting on Thursday, where policymakers are expected to push for another 0.75 percentage point interest rate hike in an attempt to rein in inflation.

European markets were under pressure for most of the day after disappointing results from tech giants on Wall Street and a bleak economic outlook overshadowed strong results from some of Europe’s biggest banks.

Europe’s tech index closed slightly lower after its US peers were dragged lower by weak results from Microsoft and Alphabet. In LONDON, the Financial Times index advances by 0.61% to 7,056.07 points.

In FRANKFURT, the DAX index rose by 1.09% to 13,195.81 points.

In PARIS, the CAC-40 index gained 0.41% to 6,276.31 points.

In MILAN, the Ftse/Mib index rose by 0.45% to 22,389.78 points.

In MADRID, the Ibex-35 index rose by 0.97% to 7,870.60 points.

In LISBON, the PSI20 index rose by 0.73% to 5,692.79 points.