European Stocks Close On Buoyant Note On Dovish Signals From Central Banks

(RTTNews) - European stocks closed higher on Thursday, with several markets rising to fresh record highs, as investors cheered dovish comments from the Federal Reserve and the Bank of England, and a surprise interest rate cut by Swiss National Bank.

The markets also digested a slew of economic data from the European region.

The pan European Stoxx 600 climbed 0.9%. The U.K.'s FTSE 100 ended stronger by 1.88%, Germany's DAX gained 0.91% and France's CAC 40 ended 0.22% up. Switzerland's SMI settled higher by 0.73%.

Among other markets in Europe, Austria, Belgium, Finland, Greece, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden and Turkiye ended with sharp to moderate gains.

Denmark and Ireland closed weak, while Iceland ended flat.

The Fed, which held rates unchanged on Wednesday, projected three rate cuts this year.

The Bank of England maintained its key policy rate for the fifth straight session on Thursday, with no members seeking a hike as inflation is expected to ease faster than expected.

The Monetary Policy Committee, led by Governor Andrew Bailey, voted 8-1 to keep the bank rate unchanged at 5.25%. No members called for a tightening this time. The current bank rate is the highest since early 2008.

The BoE projected CPI inflation to fall slightly below the 2% target in the second quarter of 2024, marginally weaker than previously expected owing to the freeze in fuel duty announced in the Budget.

The Swiss National Bank surprised markets with an unexpected interest rate cut. The SNB had lowered the policy rate by a quarter-point.

In the UK market, 3i rallied nearly 9% after the private equity and infrastructure firm reported an 8 percent increase in net asset value (NAV) over the third quarter.

Next gained more than 6% after posting improved pre-tax profit and backing guidance. St. James's Place also moved up more than 6%. Anglo American Plc, Airtel Africa, Fresnillo and Compass Group climbed 4 to 5.4%.

Antofagasta, Barclays, Halma, Marks & Spencer, Berkeley Holdings, WPP, JD Sports Fashion, Weir Holdings, Land Securities, Croda International, Glencore, Rolls-Royce Holdings, Natwest Group, Ocado Group and Lloyds Banking gained 3 to 4%. Associated British Foods, Experian, Melrose Industries and Standard Chartered also ended with strong gains.

Hikma Pharmaceuticals declined sharply. British American Tobacco, Centrica, Beazley and Reckitt Benckiser also closed weak.

In the German market, Siemens Energy surged about 7%. HeidelbergCement, Vonovia, SAP, Zalando, Merck, Infineon, Sartorius and Deutsche Bank gained 2 to 4.5%. BASF and Bayer also ended notably higher.

Fresenius Medical Care, MTU Aero Engines, Hannover Rueck, BMW, Puma, Continental and E.ON ended down by 1 to 2%.

In Paris, Alstom, WorldLine, Teleperformance, Unibail Rodamco, Carrefour, ArcelorMittal, STMicroElectronics, Societe Generale, Renault, Stellantis, Credit Agricole, BNP Paribas, Saint Gobain and Safran gained 1 to 4%.

In economic news from Europe, the euro area economy moved closer to stabilization in March as services activity expanded for the second month and the decline in manufacturing output softened, flash results from S&P Global purchasing managers' survey showed.

The composite output index rose more than expected to 49.9 in March from 49.2 in the previous month. The score was seen at 49.7.

The S&P Global UK Composite PMI edged down to 52.9 in March 2024 from 53 in February and just below the expectations of 53.1. Still, it was the fifth month of expansion in the country's private sector.

The S&P Global UK Manufacturing PMI rose to 49.9 in March of 2024 from 47.5 in the previous month, firmly above market expectations of 47.8, per preliminary data.

France's private sector activity contracted further at the end of the first quarter on faster fall in output and demand, flash survey data from S&P Global showed on Thursday.

The HCOB composite output index slid to 47.7 in March from a nine-month high of 48.1 in February. Economists had forecast the reading to improve to 48.6.

French manufacturers' confidence improved in March to the highest level in a year, largely driven by increases in production expectations and order books, monthly data from the statistical office INSEE revealed Thursday.

The manufacturing sentiment index rose to 102.0 in March from a revised 101.0 in the previous month. Meanwhile, economists had expected confidence to fall to 100.

New car registrations grew 10.1% year-over-year to 883,608 units in February, according to monthly data from the European Automobile Manufacturers' Association.