European stocks inched higher on Thursday, with the STOXX 600 up about 0.2% and the STOXX 50 also gaining 0.2%, partially recovering from losses of more than 1% in the previous session. Investors are now focused on the European Central Bank’s monetary policy decision due later in the day, with markets broadly pricing in a 25 bps rate increase. The key question will be the guidance from ECB President Christine Lagarde on the future policy path, particularly whether officials indicate that additional rate hikes may be warranted amid mounting inflationary pressures.
Rising energy costs have further clouded the outlook, with Brent crude trading above $101 per barrel. Banking shares were among the notable gainers: Societe Generale rose roughly 1.6%, Deutsche Bank advanced 1.3%, and Banco Santander added 0.7%. By contrast, technology stocks came under pressure, with ASML slipping 1.1%. SAP was one of the weakest performers on the day, dropping around 3%.
