European Stocks Close On Mixed Note; BoE Raises Interest Rates

(RTTNews) - European stocks ended on a mixed note on Thursday as investors assessed the possible policy moves by the Federal Reserve, and digested the Bank of England's decision to raise its benchmark interest rate by 25 basis points.

Investors appeared reluctant to pick up stocks amid worries about economic slowdown and a possible mild recession in the U.S. later this year.

The BoE's nine-member Monetary Policy Committee decided to lift the bank rate by 25 basis points to 4.5%, the highest since 2008. The BoE has raised its benchmark rates at every rate-setting session since December 2021.

The bank said economic activity has been less weak than expected in February. The MPC judged that the path of demand is likely to be materially stronger than expected in the February Report.

Inflation is forecast to decline to a little above 4% at the end of two and three-year horizons and materially below the 2% target.

"The MPC will adjust Bank Rate as necessary to return inflation to the 2% target sustainably in the medium term, in line with its remit," the bank said.

The pan European Stoxx 600 ended flat. The U.K.'s FTSE 100 edged down 0.14% and Germany's DAX drifted down 0.39%, while France's CAC 40 gained 0.28%. Switzerland's SMI gained 0.66%.

Among other markets in Europe, Austria, Czech Republic, Finland, Greece, Norway, Poland and Portugal ended weak.

Denmark, Iceland, Netherlands, Russia, Spain, Sweden and Turkiye closed higher. Belgium and Ireland settled flat.

In the UK market, Smurfit Kappa Group climbed 3.7%. Melrose Industries, 3I Group, Convatec Group, Admiral Group, Hargreaves Lansdown, JD Sports Fashion, St. James's Place and Halma gained 2 to 3.1%.

Rolls-Royce Holdings ended lower by 6.65%. The engine maker said it is performing in line with expectations and remains on track to meet 2023 forecasts under new CEO.

Airtel Africa drifted down 5.34%, while Antofagasta, Anglo American Plc and Glencore ended down nearly 4%.

Fresnillo, Persimmon, Berkeley Group Holdings, Rio Tinto, BP, RS Group, Tesco and HSBC Holdings lost 1.25 to 3%.

In Paris, ArcelorMittal declined 2.7%, while Michelin and Capgemini lost 2.1% and 1.9%, respectively. Bouygues, Credit Agricole, TotalEnergies, Eurofins Scientific and Unibail Rodamco also ended notably lower.

Alstom climbed more than 3.5%. LVMH, L'Oreal, Carrefour, Hermes International, Danone and Schneider Electric gained 1 to 1.8%.

In the German market, Bayer plunged more than 7% after the German drug and pesticide maker said its 2023 results would likely come in at the lower end of its target range.

Volkswagen ended lower by about 5.6% and Siemens Energy lost 2.5%. Fresenius, Deutsche Post, Deutsche Bank, E.ON and Continental lost 1 to 1.6%.

Merck surged 2.5%. Adidas gained about 2.1% and Zalando climbed nearly 2%. Deutsche Telekom, Beiersdorf, Puma, Siemens Healthineers and Henkel gained 0.8 to 1.4%.

Dutch bank ING Groep rallied nearly 4% after reporting better-than-expected first-quarter earnings and launching a new share buyback program.

Spanish telecom firm Telefonica lost more than 4% after reporting a 58% fall in Q1 net profit on higher debt costs.

Eurozone consumers expect inflation in a year to be higher than expected a month ago, and their growth and inflation expectations worsened, results of a survey by the European Central Bank showed Thursday. Median rate of expected inflation in the next 12 months climbed to 5% from 4.6% in February, the March edition of the ECB Consumer Expectations Survey revealed.