Key Points
- Pan-European index STOXX 600 rose by 0.36%, with banking and resource shares leading the gains. The basic resources sector increased by 1.7%.
- Italy’s Banco BPM surged 10.65% following its bid for asset manager Anima Holding, pushing Anima’s shares up 9.30%.
- The Bank of England and the Federal Reserve are expected to announce policy decisions that could affect financial market trends.
- Germany’s DAX index rose 1.27% despite political upheaval after Chancellor Olaf Scholz dismissed the finance minister, setting the stage for possible elections.
European stocks rose on Thursday, buoyed by gains in the banking and resource sectors as investors awaited key policy decisions from central banks, including the Federal Reserve and Bank of England (BoE). The pan-European STOXX 600 gained 1.84 or 0.36% to 508.58 at 09:10 GMT (04:10 AM ET), reflecting positive market sentiment, especially in the basic resources index, which rose 1.7% with a rebound in base metal prices.
Eurozone banks were also strong performers, up 1.1% collectively, driven by notable gains from Banco BPM (BIT: BAMI), Italy’s third-largest bank. Following its announced plans to fully control asset manager Anima Holding (BIT: ANIM), Banco BPM climbed 0.67 or 10.65% to 6.99. The proposed deal is valued at up to 1.6 billion euros (approximately $1.7 billion), driving Anima’s shares up 0.53 or 9.30% to 6.28 on the news.
The STOXX 600’s increase follows a volatile session. European markets initially rallied by 1.9% in response to Wall Street gains after former President Donald Trump reclaimed the U.S. presidency. However, stocks later moderated as investors weighed the possibility of increased tariffs under Trump’s administration.
The Bank of England is anticipated to announce an interest rate cut, only the second since 2020, in response to tame persistent inflation. Similarly, the Federal Reserve is expected to adjust its monetary policy later today, though these decisions will come after European markets have closed. Investors closely watch these decisions, which may impact currency and stock markets, particularly within the financial and export-driven sectors.
In Germany, political uncertainty is escalating as Chancellor Olaf Scholz dismissed his finance minister, leading to the collapse of the ruling coalition and setting the stage for a potential snap election. This development could lead to political volatility in Europe’s largest economy, impacting investor confidence. Nonetheless, Germany’s DAX index rose by 241.24 or 1.27% to 19,280.55 amidst the broader European gains.
European stocks are broadly optimistic, supported by resilient banking and resource performance. Investors are monitoring central bank moves and geopolitical changes in Germany that could shape the regional economic landscape.
