European Stocks Close Higher As Investors React To Fed Policy, U.S. GDP Data

(RTTNews) - European stocks closed higher on Thursday with some key indexes in the region hitting multi-week closing highs, as investors indulged in some strong buying at several counters after the Federal Reserve Chairman Jerome Powell hinted at a slowdown in the pace of rate hikes at future meetings.

As widely expected, the U.S. central bank raised interest rates by 75 basis points on Wednesday. "As the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases while we assess how our cumulative policy adjustments are affecting the economy and inflation," Powell said.

In addition to digesting the economic data from the U.S. and Europe, investors also continued to react to the latest batch of earnings announcements.

The pan European Stoxx 600 climbed 1.09%. Germany's DAX and France's CAC 40 surged 0.88% and 1.3%, respectively. The U.K.'s FTSE 100 edged down 0.04%, while Switzerland's SMI gained 0.66%.

Among other markets in Europe, Belgium, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland, Portugal and Sweden closed higher.

Austria, Czech Republic, Russia and Spain ended weak, while Turkey settled flat.

In the UK market, Fresnillo, Schrodders, Ashtead Group, Rentokil Initial, ICP, Unite Group, St. James's Place, Admiral Group and Smith (DS) gained 4 to 6.5%.

Anglo American Plc shares gained 2.5% after the company backed its FY22 production view.

Croda International, Endeavour Mining, Spirax-Sarco Engineering, Antofagasta, Mondi, ABRDN, Diageo, CRH and Next also rose sharply.

Smith & Nephew plunged more than 11%. BT Group shed 8.1% after reporting lower pre-tax profit in the first quarter.

Airtel Africa drifted down 7.4%. Barclays, Aveva Group, Standard Chartered, Whitbread, SSE, Pearson, Haleon, Centrica, British American Tobacco and HSBC Holdings lost 2 to 5%.

In the German market, Deutsche Wohnen, Deutsche Bank, Vonovia, Porsche Automobil, Qiagen, Puma, Adidas, Volkswagen, BMW, Linde, Deutsche Boerse, BASF and Merck gained 2 to 4%.

Fresenius Medical Care tanked more than 14%. Fresenius plunged more than 8% after cutting its FY outlook. Zalando lost around 2.7%.

In the French market, Schneider Electric rallied 6.3%. Kering, LVMH, Renault, Legrand, Air Liquide, Hermes International, Unibail Rodamco, Saint Gobain, Engie and Veolia gained 2 to 5.4%.

STMicroElectronics rallied more than 3% after its second-quarter revenue exceeded analysts' estimates.

Accor ended more than 11% down, weighed down by results. Teleperformance, Atos, Airbus Group, Carrefour, Orange and Danone lost 2 to 4.3%.

Germany's consumer price inflation eased for a second month in a row in July amid an easing in energy price rise, preliminary figures from Destatis showed.

The consumer price index rose 7.5% year-on-year after a 7.6% increase in June. Economists had forecast 7.4% inflation. In May, headline inflation hit a record high 7.9%.

The harmonized index of consumer prices, or HICP, rose 8.5% year-on-year following an 8.2% increase in June. Economists had forecast an 8.1% increase.

Data from U.S. Commerce Department showed a continued contraction in U.S. economic activity in the second quarter of 2022. The data said real gross domestic product decreased by 0.9% in the second quarter after slumping by 1.6% in the first quarter. Economists had expected GDP to increase by 0.5%.

With GDP unexpectedly declining for the second consecutive quarter, the data signals the U.S. economy is in a technical recession.

Meanwhile, a separate report from the Labor Department showed initial jobless claims edged down to 256,000 in the week ended July 23rd, a decrease of 5,000 from the previous week's revised level of 261,000. Economists had expected jobless claims to inch up to 253,000 from the 251,000 originally reported for the previous week.