Major European Markets Close On Firm Note

(RTTNews) - The major European markets closed higher on Thursday, with investors reacting positively to the Federal Reserve's rate cut and its comments suggesting more easing this year. The Bank of England left interest rates unchanged, as widely expected.

The pan European Stoxx 600 climbed 0.8%. The U.K.'s FTSE 100 gained 0.21%, Germany's DAX closed up by 1.35% and France's CAC 40 moved up 0.87%, while Switzerland's SMI settled with a gain of 0.42%.

Other markets in Europe closed mixed. Czech Republic, Denmark, Netherlands, Spain and Sweden ended higher.

Belgium, Finland, Ireland, Poland, Russia and Turkiye closed weak, while Iceland, Norway and Portugal ended flat.

The Bank of England decided to hold its key interest rate and to reduce the stock of government bond purchases by GBP 70 billion over the coming twelve months.

The Monetary Policy Committee, governed by Andrew Bailey, voted 7-2 to leave the bank rate unchanged at 4.00 percent.

The bank had lowered the rate five times since August 2024 and took it to the lowest since early 2023.

The Fed said on Wednesday that it decided to lower the target range for the federal funds rate by 25 basis points to 4% to 4.25%, citing a shift in the balance of risks.

The latest projections from Fed officials also suggest they expect the central bank to lower rates two more times this year, with rates forecast in a range of 3.5% to 3.75% by the end of 2025.

In the UK market, Croda International climbed 4.7%. Polar Capital Technology Trust, Halma and ICG gained 3 to 3.5%.

Scottish Mortgage, Relx, Experian, 3i Group, Informa, Prudential, Spirax Group, The Sage Group, Weir Group, Barclays, BP, Alliance Witan and Pershing Square Holdings gained 1.5 to 2.7%.

Endeavour Mining and Next closed lower by about 4% and 3.6%, respectively. WPP ended 2.4% down, while Vodafone Group, Associated British Foods, Tesco, Astrazeneca, Compass Group, Diageo and Sainsbury closed lower by 1 to 1.7%.

In the German market, SAP, Zalando, Commerzbank, Siemens Energy, Sartorius and Infineon gained 3 to 5.4%.

Continental, Daimler Truck Holding, Heidelberg Materials, Adidas, MTU Aero Engines, Siemens, Symrise, Qiagen, Mercedes-Benz and Rheinmetall also ended notably higher.

Puma closed nearly 3% down. Beiersdorf, Volkswagen, RWE, BASF and Fresenius lost 1 to 1.7%.

In the French market, STMicroElectronics rallied more than 5%. Capgemini gained 3.2% and Dassault Systemes gained nearly 3%. Legrand, Schneider Electric, Stellantis, Safran, ArcelorMittal, Essilor and Societe Generale also closed with strong gains.

Publicis Groupe ended down by about 1.4%. Pernod Ricard, Danone, Orange, Unibail Rodamco and Michelin also closed weak.

In economic news, the euro area current account surplus declined in July as the surplus on services trade and primary income decreased from June, the European Central Bank said.

The current account surplus fell to EUR 27.7 billion from EUR 35.8 billion in June. In the same period last year, the surplus totalled EUR 31.6 billion.

The surplus on goods trade rose to EUR 25 billion from EUR 23 billion in the previous month, while the surplus on services decreased to EUR 12 billion from EUR 16 billion.

The primary income halved to EUR 7 billion from EUR 14 billion. At the same time, the shortfall in secondary income narrowed to EUR 16 billion from EUR 17 billion.

In the twelve months to July, the current account surplus was EUR 315 billion or 2% of GDP. However, this was down from EUR 394 billion or 2.6% of GDP in the same period last year.