European Stocks Close Higher

European stocks closed higher on Thursday with investors closely monitoring the developments on the political front in the region, and looking ahead to U.S. non-farm payroll data, due on Friday.

Voting began across polling stations in the U.K., with polls predicting a historic win for the Labour party.

Meanwhile, investors hope the far-right National Party would not get a majority of seats in French parliament.

France’s leftist and centrist parties have pulled hundreds of candidates from Sunday’s high-stakes election in a coordinated attempt to prevent the RN from ascending to power.

The centrists and the left-wingers hope that their consolidation can prevent a clean sweep for the RN.

In the UK market, Smith & Nephew climbed nearly 7% after activist investor Cevian Capital revealed a 5% stake in the medical equipment company.

Bunzl, Melrose Industries, Lloyds Banking Group, Vistry Group and Standard Chartered gained 2 to 3%.

Barclays Group gained nearly 3%. Bank Ireland has agreed the sale of certain assets and liabilities, which together comprise its German consumer finance business to BAWAG, a wholly owned subsidiary of BAWAG Group AG.

Next, Spirax Group, Croda International, Haleon, Halma, Easyjet and Darktrace ended lower by 0.6 to 2%.

In the German market, Continental soared nearly 10%. Rheinmetall, Sartorius, HeidelbergCement, Hannover Rueck, Merck, Infineon, MTU Aero Engines, Porsche and Volkswagen gained 1 to 2.3%.

Puma drifted down 1.3%. SAP, BMW and Vonovia ended modestly lower.

In the French market, Eurofins Scientific, Societe Generale, Credit Agricole, Carrefour, BNP Paribas, Kering, Orange, Bouygues, TotalEnergies, Publicis Groupe, Veolia and AXA gained 1 to 3.2%.

On the economic front, German factory orders declined 1.6% month-on-month in May, sharper than the revised 0.6% decrease in April, Destatis reported. This was the fifth consecutive decline and also came in contrast to economists’ forecast of 0.5% growth.

Germany’s construction sector contracted at the slowest rate in 10 months in June as the downturn in new orders slowed since May, results of the HCOB Purchasing Managers’ survey, compiled by S&P Global, showed on Thursday. The construction Purchasing Managers’ Index rose to 39.7 in June from 38.5 in May. The score was firmly below the neutral 50.0 mark but hit the highest since August 2023.

The UK construction sector remained in the growth territory for the fourth straight month in June but the pace of expansion softened amid a renewed fall in housing activity, survey data from S&P Global showed on Thursday. The headline construction Purchasing Managers’ Index posted 52.2 in June, down from 54.7 in May. A reading above 50.0 signals expansion.

Car registrations in the UK rose for the twenty third consecutive month in June and achieved one million sales in the first half of the year for the first time since 2019, data from the Society of Motor Manufacturers & Traders, or SMMT, showed Thursday.

New car registrations grew by 1.1% year-over-year in June to reach 179,263 units.