European stock markets concluded Thursday on a positive note, buoyed by the Bank of England's (BoE) decision to reduce interest rates. Supportive earnings reports and economic indicators further solidified investor confidence as they anticipated the Federal Reserve's imminent monetary policy announcement.
The BoE made its second benchmark rate reduction of the year, cutting it by 25 basis points to 4.75%, a move largely anticipated. This follows the previous quarter-point reduction in August, marking the first cut since March 2020. The Monetary Policy Committee (MPC) emphasized a continued cautious approach toward monetary restrictions, stating that stringent policies would be maintained until inflationary risks diminish sufficiently.
In their statement, the MPC assured its vigilance regarding persistent inflation risks, evaluating necessary policy measures during each assembly.
Europe's regional stock index, the Stoxx 600, escalated by 0.62%. Germany's DAX rose by 1.7%, France's CAC 40 by 0.76%, whereas the UK's FTSE 100 fell by 0.32%. In contrast, Switzerland's SMI saw a 0.59% increase. Other European markets, including Austria, Belgium, Finland, Ireland, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, and Turkiye, ended on a higher note. However, Denmark and Iceland weakened, while Greece remained steady.
In the UK market, IMI experienced a near 5.5% surge, with Antofagasta climbing 4.75%. Notables like Anglo American, Glencore, Rio Tinto, Weir Group, and Spirax Group saw gains between 3 to 4%. Several entities, including BAE Systems and Sage Group, rose by 1 to 3%.
Conversely, Auto Trader Group notably declined by 7.16%. Sainsbury's shares diminished by 3.1% following the retention of their growth forecast. BT Group's shares suffered a notable dip due to revised revenue projections. Rolls-Royce also faced a 3% drop owing to its ongoing supply chain issues.
Other UK market declines involved Hiscox, Airtel Africa, Endeavour Mining, Tesco, Reckitt Benckiser, and Natwest Group, each losing 2 to 3%. AstraZeneca, Barclays, Croda International, and others also recorded sharp declines.
Germany's Rheinmetall soared nearly 10%, HeidelbergCement gained 6.5%, and Puma climbed 5.5%. Companies including Porsche, BASF, and Adidas enjoyed gains between 3 to 5%. Meanwhile, Fresenius saw a 2.2% dip, with E.ON slightly down by 1.5%. Deutsche Bank and associated have ended weaker.
In France, ArcelorMittal surged by 6.6% post less-than-anticipated decrease in quarterly core earnings, while Kering rose by nearly 4.5%. Companies like Thales and Dassault Systemes experienced modest rises. Legrand plunged over 6%, Credit Agricole dropped by 4.2%, while BNP Paribas finished 3% lower. Air France-KLM nosedived over 10% following disappointing quarterly results.
In economic developments, UK housing prices marked a record high in October, increasing for the fourth consecutive month as per Halifax. However, it is suggested that future house price growth may cool down due to gradual BoE rate cuts and governmental measures.
German industrial production notably fell by 2.5% in September, contrasting with the August increase. Exports declined for the first time in months, while imports rebounded, per Destatis data. The construction sector witnessed further decline in October per S&P Global's Purchasing Managers' Index, which dipped to 40.2 from September’s 41.7.
