European Markets Close Higher As Oil, Bond Yields Drop After Fed Rate Hike

(RTTNews) - European stocks closed higher on Thursday as falling oil prices and lower bond yields following a 25-basis point interest rate hike by the Federal Reserve and the increased trust in the U.S. central bank's resolve to bring inflation under control lifted sentiment.

On Wednesday, the Federal Reserve raised its interest rate by 25 basis points and signaled another increase later this year. The hawkish stance of the Fed resulted in a drop in oil prices and a pause in bond sell-off.

The Bank of England has left its interest rate unchanged at 3.75%, in line with expectations, for the sixth time in a row. Three out of nine Monetary Policy Committee members backed a 25 basis points hike to push policy rates to 4%.

Brent crude futures dropped to around $101.50 a barrel before recovering to $104. Oil prices extended losses from the previous session as reports of additional Saudi crude cargoes through Oman helped ease supply concerns.

The pan European Stoxx 600 climbed 0.86%. The UK's FTSE 100 gained 1.19%, Germany's DAX moved up 0.7% and France's CAC 40 ended 0.57% up. Switzerland's SMI also ended with a gain of 0.57%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Iceland, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Turkiye closed on strong note.

Greece, Ireland and Russia ended weak.

In the UK market, miners moved notably higher. Endeavour Mining, Anglo American Plc, Fresnillo and Antofagasta gained 3%-3.7%.

SSE climbed 3.6%. Airtel Africa, Kingfisher, Scottish Mortgage, Rolls-Royce Holdings, St. James's Place, Next, AstraZeneca, Metlen Energy & Metals, Hiscox, Severn Trent, Diploma, Standard Chartered, The Sage Group, Polar Capital Technology Trust and National Grid gained 2%-3%.

Pershing Square Holdings, Marks & Spencer, Coca-Cola Europacific Partners, Reckitt Benckiser Group, Intertek Group and Smith & Nephew closed notably lower.

In the German market, Porsche Automobil Holdings, Qiagen and Siemens Energy gained 3.5%-4%.

Volkswagen, Mercedes-Benz, BMW, Daimler Truck Holding, Siemens, MTU Aero Engines, Deutsche Bank, Zalando, Deutsche Post, Continental, Hochtief, RWE and Gea Group gained 1%-3%.

Fresenius Medical Care, Heidelberg Materials, Deutsche Telekom, Adidas, Symrise, Brenntag and Infineon shed 1%-2.6%.

In the French market, Eurofins Scientific, Schneider Electric, Stellantis and Renault gained 2.4%-3%.

AXA, Safran, BNP Paribas, Capgemini, Sanofi, ArcelorMittal, Credit Agricole, Michelin and Saint-Gobain also ended notably higher.

EssilorLuxottica fell 2.5%. Dassault Systemes drifted down 1.6%. Bureau Veritas and Thales ended lower by about 1.1% from previous closing levels.

In economic news, final data from Eurostat showed Eurozone inflation accelerated less than estimated in August, with harmonized inflation rising to 3.2% from 2.9% in July. The August rate was revised down from the flash estimate of 3.3%.

Meanwhile, core inflation that excludes energy, food, alcohol and tobacco, eased to 2.4%, as initially estimated, from 2.5% in July.

On a monthly basis, the harmonized index of consumer prices moved up 0.4%, matching estimate.