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European markets advanced on Thursday, driven by gains in technology and resource stocks as investors turned their attention to upcoming monetary policy announcements from the Federal Reserve and the Bank of England (BoE).
Key Market Highlights
The pan-European STOXX 600 index climbed 0.5%, led by the basic resources sector, which saw a lift from rising base metal prices. Steel giant ArcelorMittal surged nearly 5% after reporting stronger-than-expected third-quarter core profit, bolstering the sector’s performance.
Banking shares in the eurozone also rose by 1.1%, buoyed by a nearly 10% jump in Banco BPM. The Italian lender announced plans to acquire full control of Anima Holding, an asset management firm, for up to 1.6 billion euros. Anima’s shares also soared, gaining 9.3% on the news.
The technology sector, which had faced losses the previous day, rebounded by 1.5%, while the automotive sector added 1.8% following a significant decline on Wednesday. Daimler Truck benefited from this momentum, rising 4.7% after reporting third-quarter profits that exceeded market expectations.
Despite Wednesday’s strong session—where European markets mirrored a rally on Wall Street spurred by Donald Trump’s election victory—investors remained wary of potential trade tariffs and their impact on market sentiment.
Individual Stock Movements
- Adyen: The Dutch fintech firm Adyen faced a sharp 7.8% decline after revealing third-quarter processed volumes that fell short of market expectations.
- ITV: British broadcaster ITV also suffered a 7.8% loss, following disappointing results that showed an 8% drop in revenue over the nine months ending September 30.
Political Uncertainty in Germany
Germany’s political landscape faced turmoil as Chancellor Olaf Scholz dismissed his finance minister, setting the stage for a snap election. This move destabilized Europe’s largest economy, although the DAX index managed to gain 1.3% after dropping over 1% the previous day.
Central Bank Rate Decisions
Investors are keenly awaiting rate decisions from major central banks. The BoE is expected to cut interest rates for the second time since 2020, with market participants seeking clues on future monetary policy moves. Meanwhile, the Federal Reserve is also anticipated to announce a rate cut later in the day.
Sweden’s central bank (Riksbank) reduced its key interest rate from 3.25% to 2.75%, aligning with expectations, while Norway’s central bank held rates steady at 4.50%, a level not seen in 16 years.
As markets digest the outcomes of these monetary policy meetings, they remain sensitive to any signals on future economic conditions, especially against the backdrop of political uncertainty and ongoing global economic challenges.
