European Stocks Recover To Settle Higher After British PM Lizz Truss Resigns

(RTTNews) - Despite spending much of the day's trading session in negative territory, European stocks closed broadly higher on Thursday, reacting to the U-turn in the British fiscal plan and Prime Minister Lizz Truss's decision to resign from her post.

With her own Conservative Party members revolting and joining the protest againt the tax-cutting budget, Truss chose to step down, making way for a new leader to take up the mantle of Prime Ministership.

Worries about rising inflation, looming interest rate hikes, and fears of a recession in several economies across the globe continued to weigh, but the markets still managed to garner enough support to sign off on a positive note today.

Comments from Bank of England Deputy Governor Ben Broadbent that signaled the interest rates are unlikely to rise as much as markets currently expect, contributed a bit in lifting sentiment.

"Whether official interest rates have to rise by quite as much as currently priced in financial markets remains to be seen," Broadbent said at a speech in London. The MPC is likely to respond relatively promptly to news about fiscal policy, he said.

The pan European Stoxx 600 gained 0.26%. The U.K.'s FTSE 100 climbed 0.27%, Germany's DAX advanced 0.2% and France's CAC 40 surged 0.76%. Switzerland's SMI edged down 0.1%.

Among other markets in Europe, Austria, Czech Republic, Greece, Ireland, Netherlands, Norway, Poland, Portugal, Russia and Spain closed with sharp to moderate gains.

Denmark, Finland, Iceland and Sweden ended weak, while Belgium settled flat.

Turkiye ended modeslty higher after the country's central bank again lowered its key interest rate massively at its October meeting, despite elevated inflation. The Monetary Policy Committe of the TCMB lowered the policy rate from 12% to 10.5%. Economists had expected the rate to be cut to 11%.

In the UK market, Fresnillo, Lloyds Banking Group, Carnival, Ocado Group, Land Securities and Antofagasta gained 3 to 4%.

Segro, RightMove, Barratt Developments, Next, Glencore, Royal Mail, Royal Dutch Shell, JD Sports Fashion, Entain, Kingfisher and Just Eat Takeaway.com also ended sharply higher.

ITV ended more than 4% down. Polymetal International, Vodafone, Bunzl, Hikma Pharmaceuticals, BT Group, Ferguson, IAG, Coca-Cola and AstraZeneca lost 1.6 to 4%.

In the German market, Sartorius rallied nearly 7%, rebounding after suffering a severe setback in the previous session. Siemens Healthineers gained about 4% and Vonovia surged 3%.

Continental, Infineon Technologies, Covestro, Deutsche Wohnen, Zalando, Fresenius, Symrise and Porsche Automobil gained 1 to 2.5%.

In the French market, Faurecia, Dassault Systemes, ArcelorMittal, WorldLine, STMicroElectronics, Kering, Capgemini and Renault advanced 2 to 4%.

Swedish telecom giant Ericsson tumbled 14% after posting weaker-than-expected Q3 operating profit and margins.

Data published by the European Central Bank showed the euro area current account balance logged its biggest deficit ever in the history,

The current account balance showed a deficit of EUR 26.323 billion in August, up from EUR 19.960 billion in July. In the corresponding month last year, there was a surplus of EUR 17.089 billion.

Data from Destatis showed Germany's producer price inflation stayed steady in September to remain at its highest level ever amid soaring energy prices. Producer prices surged 45.8% year-over-year in September, the same rate of increase as in August. Meanwhile, the rate was forecast to ease to 44.7%.

Survey results from the Statistical Office Insee showed that the confidence among French manufacturers bounced back unexpectedly in October, after falling in the previous three months. The manufacturing confidence index rose slightly to 103 in October from 102 in September. Meanwhile, economists had forecast the index to fall to 101.

Switzerland's foreign trade surplus increased in the third quarter, as exports rebounded amid a fall in imports, data from the Federal Customs Administration showed on Thursday.

The trade surplus rose to CHF 8.034 billion in the third quarter from CHF 7.634 billion in the previous three-month period. Exports climbed 0.7% sequentially in the September quarter, reversing a 0.6% fall in the June quarter, while imports logged a 0.5% decline in the third quarter, in contrast to a 0.5% gain in the previous quarter.