European Stocks Close On Firm Note After ECB's Rate Decision

(RTTNews) - European stocks closed higher on Thursday with investors reacting to a slew of earnings and economic data, and the European Central Bank's decision of a 25-basis point interest rate cut.

Markets also digested the Federal Reserve's decision to hold rates unchanged and its remarks about inflation and future interest rate moves.

The ECB cut its interest rates for a fourth policy session in a row as expected as euro area economy ground to a half in the final quarter of 2024 and inflationary pressures increased.

The Governing Council, led by ECB President Christine Lagarde, lowered the benchmark - the deposit rate - by 25 basis points to 2.75%.

The central bank for the single currency bloc has lowered interest rates in every rate-setting session since September and each reduction was 25 basis points.

The pan European Stoxx 600 climbed 0.86%. The U.K.'s FTSE 100 gained 1.04%, Germany's DAX ended higher by 0.41% and France's CAC 40 closed stronger by 0.88%, while Switzerland's SMI settled 0.59% up.

Among other markets in Europe, Austria, Belgium, Finland, Greece, Ireland, Netherlands, Norway, Poland, Russia, Spain and Sweden closed higher.

Iceland edged up marginally, while Denmark, Portugal and Turkiye ended flat.

In the UK market, St. James's Place shares soared more than 11% after the company reported a record £190.2bn in assets under management despite a drop in net inflows over the past year.

Airtel Africa gained 9% after reporting strong growth in nine-month pre-tax profit. The company posted a profit before tax of $494 million, up 796.6% from $55 million last year.

Net profit attributable was $164 million in the nine-month period, compared to a loss of $61 million in the same period last year. Airtel Africa recorded basic earnings per share of 4.4 cents, compared to a loss of 1.6 cents a year ago.

Endeavour Mining rallied 7.2%. Fresnillo climbed 5.6%, while EasyJet ended 4.3% up. Antofagasta, Marks & Spencer, Pearson, Prudential, ICG, Shell, United Utilities, WPP, Glencore, RightMove, Informa, Spirax Group and Rolls-Royce Holdings gained 2 to 3.1%.

BT Group declined sharply after reporting lower revenues for the third quarter. The company reported third-quarter profit before tax of 427 million, up 1% from last year, primarily due to EBITDA growth. Adjusted EBITDA was 2.10 billion pounds, up 4% from last year's 2.03 billion pounds.

BT Group's revenue in the third quarter was 5.2 billion pounds, down 3% from the prior year. Adjusted revenue 5.18 billion pounds fell 3% from 5.34 billion pounds a year ago.

Whitbread closed down 2.3%. Admiral Group and Smith (DS) also ended notably lower.

In the German market, Siemens Energy rallied more than 4.5%. Vonovia and Brenntag gained about 3.5% and 3%, respectively.

Beiersdorf, Sartorius, Merck, Continental, E.ON., Bayer, Zalando, Daimler Truck Holding, HeidelbergCement, Qiagen, Mercedes-Benz, BASF, Adidas and Porsche closed higher by 1 to 2.2%.

Infineon closed down 3.4%. Deutsche Bank shed about 3.1%, while Deutsche Post and Symrise ended lower by 1.9% and 1.8%, respectively.

In the French market, Eurofins Scientific climbed about 5%. Kering closed 4.1% up, while L'Oreal, ArcelorMittal and Vivendi gained 2 to 2.5%.

Carrefour, BNP Paribas, Capgemini, Edenred, Sanofi, Thales, Michelin, Schneider Electric, Saint-Gobain and Publicis Groupe ended higher by 1.5 to 2%. Pernod Ricard, Danone, Vinci, Teleperformance, Air Liquide, Stellantis and Unibail Rodamco also closed on a firm note.

STMicroElectronics tanked more than 10% on weak results. The company announced that its net income for the fourth-quarter was $341 million, compared to $1.076 billion in the year-ago quarter. The earnings per share has also decreased to $0.37 compared with $1.14 in the prior year.

The net revenue dropped to $3.32 billion from $4.28 billion last year's quarter, the company said, adding that its expects first-quarter net revenue to decline 24.4% sequentially to $2.51 billion.

On the economic front, the German economy logged an unexpected contraction in the fourth quarter on weaker exports, adding fears of recession, preliminary data from Destatis showed. Gross domestic product fell 0.2% from a quarter ago, confounding expectations for an expansion of 0.1%.

Germany's import prices increased for the second straight month in December, and at the fastest pace in nearly two years. Import prices registered an annual increase of 2%, following a 0.6% rise in November.

The French economy contracted for the first time in nearly two years in the fourth quarter as the positive impact of the Paris Olympics and Paralympic Games faded, official data revealed.

Data from the statistical office INSEE said France's fourth-quarter gross domestic product shrank 0.1% sequentially after expanding 0.4% in the third quarter, according to first estimate.

This was the first quarterly fall since the March quarter of 2023, when GDP fell similarly by 0.1%. Detailed data for the fourth quarter is due on February 28.

In 2024 as a whole, GDP grew 1.1%, the same pace of growth as seen in 2023 and 2.6% in 2022.

Another data from the statistical office INSEE showed that household spending grew by more-than-expected 0.7% in December after a 0.2% increase in November. Consumption was expected to rise 0.1%.

A report from Bank of England said net consumer credit borrowing by individuals in UK was £1.045 billion in December 2024, slightly up from £0.9 billion in November and above forecasts of £0.95 billion.

A separate data from Bank of England said net mortgage approvals for house purchases in the UK, an indicator of future borrowing, rose to 66.53 thousand in December 2024 from an upwardly revised 66.06 thousand in the previous month, and above expectations of 65.4 thousand.