European Stocks Close Broadly Lower After BoE, SNB Raise Interest Rates

(RTTNews) - Despite recovering from the day's lows, European stocks closed on a weak note on Thursday as investors weighed how the interest rate hikes by the Federal Reserve, the Bank of England and Swiss National Bank might impact economic growth over the near to medium term.

Norway's Norges Bank also raised its key rate, while Turkish Central bank decided to leave its key interest rate unchanged.

Despite the recent turbulence in the banking industry, the Fed hiked interest rates on Wednesday and signaled further tightening.

The Swiss National Bank and the Bank of England, both raised their respective interest rates today.

The SNB raised its key rate by 50 basis points to 1.5%, as widely expected. The bank, which has now raised rates for the fourth time in succession, also said further hikes are likely.

"It cannot be ruled out that additional rises in the SNB policy rate will be necessary to ensure price stability over the medium term," the central bank said, and added that further sales of its foreign currency reserves to support the franc are also possible.

The Bank of England hiked its key interest rate for the eleventh consecutive session on Thursday as an unexpected rise in inflation compelled policymakers to ignore the banking sector turmoil.

The nine-member Monetary Policy Committee decided to lift the bank rate by 25 basis points to 4.25%. This was the highest rate since 2008. In the current tightening cycle that began in December 2021, the rate was raised by 415 basis points.

US Treasury Secretary Janet Yellen's comments that the regulators are not looking to provide any "blanket" deposit insurance to stabilise the US banking system, without working with law makers, weighed as well on sentiment.

The pan European Stoxx 600 slid 0.21%. The U.K.'s FTSE 100 drifted down 0.84%, Germany's DAX edged down 0.03% and France's CAC 40 edged up 0.05%, while Switzerland's SMI lost 0.59%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Finland, Ireland, Norway, Poland, Portugal, Russia, Spain and Sweden ended weak.

Denmark, Greece, Iceland, Netherlands and Turkiye closed higher.

In the UK market, British American Tobacco declined 5.5%. Schrodders, Standard Chartered, HSBC Holdings, Kingfisher, Informa, M&G, Imperial Brands, Barclays and Tesco lost 2 to 4%.

Shell, Lloyds Banking Group, CRH and B&M European Value Retail also ended sharply lower.

Melrose Industries rallied 3.7%. Endeavour Mining, Ocado Group, Scottish Mortgage, BAE Systems, Segro, Centrica and Beazley gained 1.3 to 3%.

In the German market, Commerzbank and Deutsche Bank lost about 3.6% and 3.1%, respectively. Volkswagen, Covestro, Vonovia and Bayer lost 1 to 1.6%.

Zalando climbed more than 2.5%. Infineon Technologies surged 2.2%, while Siemens Energy, Deutsche Post, Symrise, E.ON and Adidas gained 1 to 1.6%.

In Paris, Unibail Rodamco tumbled nearly 4% and Teleperformance ended lower by about 3%. Societe Generale, Vinci, BNP Paribas, Legrand, TotalEnergies, Publicis Groupe, Carrefour, Saint Gobain and Credit Agricole drifted down 1 to 2.3%.

Sanofi gained 5.3% after the company announced that its asthma and eczema drug Dupixent, jointly developed with Regeneron, met all targets in a trial to treat "smoker's lung".

Hermes International, Vivendi, Kering and Thales advanced 1 to 1.3%.

In the Swiss market, UBS Group ended 4.3% down, Credit Suisse closed lower by 3.15%. Swiss Life Holding, Holcim and Swiss Re also ended sharply lower.