European Stocks Close On Firm Note After ECB’s Interest Rate Decision

European stocks closed on a firm note on Thursday after the European Central Bank (ECB), which raised interest once again, signaled the end of its rate-hike campaign.

Investors also digested the latest batch of economic data from Europe, the U.S., and China.

The People Bank of China announced that it would cut the reserve requirement ratio on most banks by 25 basis points from September 15, aiming to boost its stuttering economy.

The pan European Stoxx 600 climbed 1.52%. The U.K.’s FTSE 100 surged 1.95%, Germany’s DAX advanced 0.97% and France’s CAC 40 gained 1.19%, while Switzerland’s SMI ended 1.11% up.

Among other markets in Europe, Austria, Belgium, Denmark, Finland, Greece, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Turkiye closed higher.

Iceland and Russia ended weak.

The ECB raised its key interest rates for the tenth policy session in a row as rate-setters assessed the euro area inflation to remain “too high for too long”, but signaled a pause, possibly a long one, in the tightening cycle as the bank saw it prudent to guide that the current level of interest rates if maintained for long would ensure a timely return of inflation to the 2% target.

The Governing Council, led by ECB President Christine Lagarde, raised the main refinancing rate, or refi, by 25 basis points at 4.5%. The deposit facility rate was hiked to a record high 4% and the lending rate was increased to 4.75%.

The ECB has raised rates by a cumulative 400 basis points with hikes in every policy session of the current tightening cycle that began in July last year.

Automakers had a weak outing after Beijing blasted the launch of a probe by the European Commission into China’s electric vehicle (EV) subsidies as protectionist.

In the UK market, Anglo American Plc and Pennon both gained about 7.5%. Rio Tinto, Carnival, Glencore, Flutter Entertainment, British Land Company and Severn Trent climbed 4 to 5%.

CRH, Smurfit Kappa Group, Land Securities, Phoenix Holdings, BP, Segro, Just Eat Takeaway.com, Antofagasta, Standard Chartered, JD Sports Fashion, HSBC Holdings, Auto Trader Group and Prudential gained 2.5 to 4%.

In the German market, Vonovia rallied more than 5%. Siemens Energy gained about 4.2%. Merck, Sartorius, Fresenius, Hannover Rueck, Deutsche Post, Allianz, Deutsche Bank, BASF, RWE, Siemens, Fresenius Healthcare, Infineon and Siemens Healthineers ended higher by 1.2 to 3%.

Porsche, Henkel, BMW and Continental ended lower by 1 to 2.4%.

In Paris, Alstom climbed more than 4.5%. Bouygues, Unibail Rodamco, Edenred, BNP Paribas, WorldLine, Hermes International, Vinci and ArcelorMittal gained 2 to 2.5%.

Publicis Groupe, Thales and Stellantis ended lower by 1 to 1.3%.

On the economic front, UK home rents continued to register double-digit growth as rental supply remained low, the property website Zoopla said in its September Rental Market Report, released Thursday. Rents for new lets increased 10.5% in July from a year ago, slower than the 12.2% rise in the previous month.

Switzerland’s producer and import prices declined for the fourth straight month in August, data from the Federal Statistical Office showed on Thursday.

Producer and import prices dropped 0.8% year-on-year in August, slightly faster than the 0.6% fall in the previous month.

The producer price index climbed 1% annually in June, while import prices registered a decrease of 4.1%. On a monthly basis, producer and import prices dropped 0.2% in August versus a 0.1% rise in July.