Key Points
- European stocks saw mixed performance, healthcare and telecom stocks boosted, with STOXX 600 down 0.14%.
- Investors await U.S. inflation data for clues on Federal Reserve rate cuts.
- GSK shares jump 5.32% on a smaller-than-expected $2.2 billion settlement over Zantac lawsuits.
- BMW slips 0.28% on weaker Q3 sales, impacted by China’s market.
European stocks saw mixed performance on Thursday, with the pan-European STOXX 600 index dropping 0.14% or 0.71 to 519.34 as of 8:13 AM GMT (4:13 AM ET). The market’s positive movement was buoyed by optimism surrounding potential stimulus measures in China and expectations for key U.S. inflation data later in the day. Gains in the healthcare and telecom sectors helped offset losses in technology stocks, as European investors found reassurance in the broader global market trends.
European markets followed a positive lead from their Asian counterparts, spurred by hopes of further stimulus from the Chinese government to bolster its slowing economy. Investors anticipate a boost to liquidity and economic activity that could support global growth, benefitting European exports and industries.
Additionally, the optimism in European markets was influenced by record highs on Wall Street earlier in the week. Major U.S. indices surged Wednesday after the Federal Reserve’s September meeting minutes were released. The minutes revealed that a “substantial majority” of Fed officials favored a half-point rate cut to stimulate the U.S. economy. This news alleviated concerns over tighter monetary policies and reassured investors across the globe.
Investors closely monitor the release of the U.S. consumer price index (CPI) data, which could provide further guidance on the Federal Reserve’s monetary policy trajectory. With inflation pressures easing slightly in recent months, traders are now pricing an 85% chance of a smaller 25 basis points rate cut in the Fed’s next meeting. The inflation report is expected to shed light on the Fed’s plans for the rest of the year, providing critical insights for global markets.
In single-stock news, GSK shares surged by 5.32% or 77.50 to 1,535.50 after the British pharmaceutical company announced a settlement of up to $2.2 billion for U.S. lawsuits claiming its now-discontinued heartburn medication Zantac caused cancer. The settlement amount was smaller than anticipated by some analysts, easing concerns about its financial impact on GSK. Meanwhile, BMW (ETR: BMWG) shares fell by 0.28% or 0.22 to 76.98 after the German automaker reported declining third-quarter sales, citing weaker performance in the Chinese market and delivery stoppages.
