European Stocks Close Mixed After ECB, SNB Cut Interest Rates

RTTNews | 254 days ago
European Stocks Close Mixed After ECB, SNB Cut Interest Rates

(RTTNews) - European stocks closed on a mixed note on Thursday with investors digesting the European Central Bank's decision to cut interest rates by 25 basis points, and weighing the prospects of another cut in the first quarter of 2025.

The Swiss National Bank reduced its benchmark rate by a sharper-than-expected 50 basis points to curb the strength of the Swiss franc. At the first policy meeting of Martin Schlegel as chairman, the policy rate was lowered to 0.5% from 1%. The new rate takes effect on December 13.

Investors awaited the Federal Reserve's policy announcement next week, and waited for French President Emmanuel Macron to appoint a new prime minister.

The pan European Stoxx 600 closed down 0.14%. France's CAC 40 edged down 0.03%, while the U.K.'s FTSE 100 and Germany's DAX gained 0.12% and 0.13%, respectively. Switzeland's SMI gained 0.29%.

Among other markets in Europe, Austria, Belgium, Greece, Iceland, Ireland and Portugal closed higher.

Denmark, Finland, Netherlands, Poland, Russia, Spain and Sweden ended weak, while Norway and Turkiye closed flat.

The ECB lowered its key interest rate by 25 basis points again, in line with economists' expectations, as policymakers assessed that the disinflation process is on track though growth concerns remain.

The Governing Council, led by ECB President Christine Lagarde, cut the key policy rate - the deposit rate - by a quarter-basis point to 3% on Thursday. The previous change was a reduction by the same volume in October following a similar cut in September. The main refinancing rate or the refi was reduced to 3.15% and the marginal lending facility rate to 3.4%.

"[The Governing Council] will follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance," the ECB said.

ECB policymakers will base their interest rate decisions on the "assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission", the bank added. "The Governing Council is not pre-committing to a particular rate path."

In its latest round of macroeconomic projections, unveiled on Thursday, the ECB staff forecast Eurozone headline inflation at 2.4% this year, 2.1% next year, 1.9% in 2026 and 2.1% in 2027. Core inflation is projected at 2.9% this year, 2.3% next year, and 1.9% in both 2026 and 2027.

The euro area economy is projected to grow 0.7% this year, 1.1% next year, 1.4% in 2026 and 1.3% in 2027.

In the UK market, Diageo rallied 2.77% thanks to a rating upgrade by UBS. Severn Trent, Scottish Mortgage, Barclays, Pershing Square Holdings, Lloyds Banking Group, BAE Systems, IAG, Sage Group, Sainsbury (J), Centrica, United Utilities, Smith & Nephew, Marks & Spencer Group and Schrodders gained 1 to 2%.

Rentokil Initial closed nearly 4% down. Antofagasta drifted down 3.4%. Associated British Foods, ICG, Fresnillo, Endeavour Mining, Berkeley Group Holdings, Vistry Group and Diploma closed lower by 2 to 3%.

Persimmon, Rio Tinto, Melrose Industries, Bunzl, Glencore and Halma also declined sharply.

In the German market, BMW climbed about 2.3%. Puma, SAP, Mercedes-Benz, Rheinmetall, Beiersdorf, Volkswagen, Adidas, MTU Aero Engines, Bayer and BASF gained 0.6 to 1.6%.

Siemens Energy closed down nearly 4%. Deutsche Post and Munich RE both closed lower by about 1.8%. Henkel, Brenntag, Merck, HeidelbergCement, Siemens, Allianz, RWE and Siemens Healthineers also ended weak.

In the French market, Airbus Group, Societe Generale, Pernod Ricard, Hermes International, Kering, Accor and Eurofins Scientific gained 1 to 2.2%.

Edenred lost more than 3%. Teleperformance, ArcelorMittal, Legrand, Capgemini, BNP Paribas, Schneider Electric, Sanofi and Safran closed lower by 0.8 to 1.6%.

read more
U.S. Dollar Drops After Powell's Speech

U.S. Dollar Drops After Powell's Speech

The U.S. dollar weakened against its major counterparts in the New York session on Friday, as Federal Reserve Chair Jerome Powell hinted at a potential rate cut next month.
RTTNews | 15h 47min ago
TSX Hits New Record High As Stocks Rally On Fed Rate Cut Hopes

TSX Hits New Record High As Stocks Rally On Fed Rate Cut Hopes

The Canadian market is up firmly in positive territory a little past noon on Friday, with stocks from across several sectors moving higher on strong buying support amid rising hopes of an interest rate cut by the Federal Reserve in September.
RTTNews | 21h 17min ago
Powell Says Outlook, Shifting Balance Of Risks 'May Warrant' Lower Rates

Powell Says Outlook, Shifting Balance Of Risks 'May Warrant' Lower Rates

Federal Reserve Chair Jerome Powell delivered a highly-anticipated speech before the Jackson Hole Economic Symposium on Friday, although he touched only briefly on the outlook for monetary policy. "With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance," Powell said.
RTTNews | 23h 26min ago
FTSE 100 Down Slightly; Standard Chartered Shares Up Sharply

FTSE 100 Down Slightly; Standard Chartered Shares Up Sharply

U.K. stocks are turning in a mixed performance in cautious trade on Friday, amid a lack of fresh triggers. Investors are awaiting Fed Chair Jerome Powell's speech later in the day at the Jackson Hole Symposium, for clues about U.S. central bank's interest rate move next month.
RTTNews | 1 day ago
U.S. Dollar Rises Ahead Of Fed's Powell Speech

U.S. Dollar Rises Ahead Of Fed's Powell Speech

The U.S. dollar strengthened against other major currencies in the European session on Friday, as traders expect speech by Fed Chair Jerome Powell at the Jackson Hole Symposium.
RTTNews | 1 day ago
CAC 40 Up Slightly In Lackluster Trade

CAC 40 Up Slightly In Lackluster Trade

French stocks are mostly subdued on Friday with investors refraining from making significant moves, choosing to wait for key speeches from central bank chiefs at the Jackson Hole Symposium. The focus is on Fed Chair Jerome Powell's speech for clues about interest rate cuts in September.
RTTNews | 1 day ago