European shares advanced on Thursday, bolstered by broad-based gains amid a global upbeat sentiment. Investors closely monitored British, Swiss, and Norwegian stocks following significant central bank decisions. The pan-European STOXX 600 index ended the day up 0.9%, reaching a weekly high. This rise was largely driven by a 1.8% increase in technology stocks, with real estate stocks also contributing with a 1.7% rise.
ASM International played a pivotal role in lifting the tech index, soaring 5.3% after Morgan Stanley upgraded the semiconductor equipment manufacturer from “equal-weight” to “overweight.” The positive global sentiment was further supported by gains in U.S. equities, particularly with chip designer Nvidia’s performance, and the interpretation of interest rate decisions from three central banks in Europe.
In Switzerland, the benchmark index rose nearly 0.6% following the Swiss National Bank’s decision to cut interest rates by 25 basis points to 1.25%. This marked the second cut since March, prompted by a decrease in inflation. Kathleen Brooks, research director at XTB, noted that while the rate cut aimed to impact the FX market, there is a risk that a strong currency could lead to deflation and negatively affect exports.
Meanwhile, Norway’s central bank held its key policy interest rate steady at a 16-year high of 4.50%, with an anticipated cut in 2025. This decision helped Norwegian stocks gain 0.4%. In the UK, the FTSE 100 climbed 0.8% after the Bank of England maintained its main interest rate. However, the possibility of a future rate cut looms closer as some policymakers described their stance as “finely balanced.”
On the economic data front, German producer prices fell slightly more than expected in May. At the same time, flash estimates indicated a 0.3% rise in consumer confidence in the eurozone in June. In company news, Evotec surged 13.9% to lead the STOXX 600, following media reports that the German biotech firm is in discussions with advisers amid speculation of a potential takeover.
Millennium BCP saw an 8.3% rise after Jefferies upgraded the Portuguese bank’s rating to “buy.” Conversely, Danone dropped 2.5% after the French food group did not provide a guidance upgrade in its medium-term targets as it plans to expand into health and medical nutrition. This decline placed Danone at the bottom of France’s CAC 40 index, which still managed to increase by 1.3%.
Lastly, Tate & Lyle fell by 9% after the British food ingredients maker announced plans to acquire U.S.-based CP Kelco for $1.8 billion from J.M. Huber Corp. Additionally, Tate & Lyle’s shares were trading ex-dividend, contributing to the decline.
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