European equities experienced a modest uptick on Thursday as investors awaited the European Central Bank's (ECB) monetary policy announcement later in the day.
Market analysts anticipate that the ECB will maintain its key interest rates unchanged after the June rate cut—the first in five years—which saw the main refinancing rate reduced by 25 basis points to 4.25 percent. Additionally, the ECB is expected to refrain from disclosing future policy plans amid ongoing concerns about wage growth and underlying inflation.
The outcome of the ECB Governing Council meeting is scheduled to be released at 8:15 am ET, followed by a press conference with ECB President Christine Lagarde at 8:45 am ET.
The pan-European STOXX 600 index rose 0.4 percent to 517.11, ending a three-session losing streak. In country-specific indices, Germany's DAX increased by 0.2 percent, France's CAC 40 by 0.5 percent, and the U.K.'s FTSE 100 by 0.9 percent.
In economic data, U.K. wage growth eased in the three months leading up to May, sparking speculation of potential rate cuts ahead of the Bank of England's rate decision next month. Wage growth dipped below 6 percent for the first time in nearly two years, indicating a potential cooling of the labor market.
In corporate news, Swedish hygiene products manufacturer Essity surged 4.4 percent following a strong second-quarter earnings report. Conversely, industrial bearings maker SKF saw its shares fall by 3.5 percent after reporting lower-than-expected Q2 profits. Swiss engineering giant ABB dropped by 6 percent as Q2 orders declined 3 percent to $8.44 billion, compared to $8.67 billion the previous year.
Finnish telecom equipment maker Nokia saw its shares tumble 5.2 percent after reporting a 32 percent drop in second-quarter operating profit, attributed to weak demand for its 5G products.
London's energy sector tracked higher oil prices, with BP increasing by 1.5 percent and Shell by 1.3 percent. Private equity and infrastructure investment firm 3i Group rose 1.4 percent following an "encouraging start" to the new financial year.
Frasers Group experienced a nearly 9 percent surge after issuing optimistic fiscal-year targets that exceeded market expectations. French advertising company Publicis Groupe rose 4.6 percent after raising its organic growth target for 2024, buoyed by strong first-half results.
Automakers rallied after industry data revealed a robust recovery in EU new car sales for June, driven by gains in three of the region's four major markets. New car registrations increased by 4.3 percent year-over-year to 1.089 million units in June, reversing a 3.0 percent decline in May. BMW gained 1.9 percent, Mercedes Benz 2.1 percent, and Volkswagen 1.7 percent.
