European Stocks Close Higher On Rate Cut Hopes

(RTTNews) - European stocks closed higher on Thursday on expectations the European Central Bank (ECB) will start cutting interest rates soon.

ECB official Mario Centeno said the central bank is committed to tailoring its monetary policy to local conditions rather than taking cues from the Federal Reserve.

Bank of England Governor Andrew Bailey highlighted the relatively subdued inflationary pressures faced by the UK and Europe compared to the US. Earlier, BoE's Megan Green had highlighted concerns over high wage growth and services inflation in the UK, suggesting a likely delay in interest rate cuts.

"I think the probability is increasing that we will see a rate cut in June but there are still some caveats," the chief of Germany's Bundesbank told CNBC's Karen Tso at the IMF Spring Meetings on Wednesday.

Geopolitical risk is the biggest threat to a prospective rate cut from the European Central Bank, according to ECB policymaker Robert Holzmann.

The pan European Stoxx 600 ended up by 0.24%. France's CAC 40 ended higher by 0.52%, while the U.K.'s FTSE 100 and Germany's DAX climbed 0.37% and 0.38%, respectively. Switzerland's SMI edged down 0.01%.

Among other markets in Europe, Austria, Belgium, Finland, Greece, Poland, Portugal, Spain and Sweden ended higher.

Denmark, Iceland and Norway closed weak, while Netherlands, Russia and Turkiye ended flat.

In the UK Market, Prudential gained more than 4%. Standard Chartered, Beazley, Severn Trent, Barclays Group, Airtel Africa, Associated British Foods and BT gained 2 to 3%.

EasyJet gained nearly 4% after the airline forecast a smaller-than-expected winter loss.

Rentokil Initial tumbled more than 7%. Spirax-Sarco Engineering, BAE Systems, Burberry Group, Experian and Croda International ended notably lower.

In the German market, Puma rallied 4%. Adidas, Continental, Fresenius Medical Care, Commerzbank, Deutsche Bank, Vonovia, Siemens, BMW, Beiersdorf and Henkel gained 1 to 3%.

Sartorius tumbled nearly 16% after Q1 order intake and revenue missed analyst expectations.

Rheinmetall ended more than 4% down. Infineon, Siemens Healthineers, HeidelbergCement, Covestro and Zalando lost 1 to 2%.

In the French market, Alstom climbed nearly 6%. Edenred surged about 5%. Schneider Electric, Veolia, Societe Generale, Legrand, BNP Paribas, Eurofins Scientific, Credit Agricole, Essilor, Michelin and Unibail Rodamco gained 1.5 to 3%.

Pernod Ricard, Orange, Vinci, Renault, L'Oreal, ArcelorMittal and AXA also ended notably higher.

WorldLine ended lower by more than 5%. Thales, Sanofi, STMicroElectronics, Capgemini and LVMH lost 0.8 to 1.2%.

On the economic front, the European Central Bank reported that the euro area current account surplus decreased to a 3-month low in February.

The current account surplus dropped to EUR 29.0 billion in February from EUR 39.0 billion in January. This was the lowest surplus since November last year.

Euro area construction output grew for a third straight month in February and at a stronger pace, mainly led by civil engineering works and rebound in building construction, preliminary data from the statistical office Eurostat showed.

Construction output rose a calendar and seasonally adjusted 1.8% month-on-month following a downwardly revised 0.2% gain in January.

New car sales in the EU decreased for the first time in three months in March amid weaker demand among four major markets, especially in Germany and Spain, monthly data from the European Automobile Manufacturers' Association, or ACEA, showed.

New car registrations dropped 5.2% year-over-year to 1.0 million units in March, reversing a 10.1% surge in February.

The timing of the Easter holidays negatively impacted last month's sales across most EU markets, the ACEA said.

Among the four major markets, the German market showed the worst decline of 6.2%, followed by Spain with a 4.7% fall. Car sales in Italy dropped 3.7% over the year, and the French car market faced 1.5% lower demand.