European Shares Gain Before ECB Decision

European stocks edged higher on Thursday ahead of the monetary policy announcement from the European Central Bank (ECB) later in the day.

Markets expect the ECB to keep its key rates on hold after cutting the rates for the first time in five years in June. The main refinancing rate was lowered by 25 basis points to 4.25 percent.

The bank is also set to refrain from providing more information about its future course of action amid concerns about the strength of wage growth and underlying inflation.

The ECB releases the outcome of the governing council meeting at 8.15 am ET.

Following the announcement, ECB President Christine Lagarde holds press conference at 8.45 am ET.

The pan European STOXX 600 was up 0.4 percent at 517.11 after three straight sessions of losses.

The German DAX edged up 0.2 percent, France’s CAC 40 gained half a percent and the U.K.’s FTSE 100 climbed 0.9 percent.

Data showed today U.K. wage growth softened in the three months to May period, raising hopes of interest rate cuts ahead of the Bank of England’s rate decision next month.

Wage growth slipped below 6 percent for the first time in almost two years in a sign that the labor market is cooling.

In corporate news, Swedish hygiene products maker Essity rallied 4.4 percent after second-quarter core earnings beat expectations.

Industrial bearings maker SKF tumbled 3.5 percent after Q2 profit missed estimates.
Swiss engineering group ABB lot 6 percent after orders dropped 3 percent to $8.44 billion in the second quarter from prior year’s $8.67 billion.

Finnish telecom equipment maker Nokia plummeted 5.2 percent after the company reported a 32 percent drop in second-quarter operating profit due to weak demand for its 5G equipment.

Energy stocks tracked oil prices higher in London, with BP rising 1.5 percent and Shell adding 1.3 percent.

3i Group gained 1.4 percent after the private equity and infrastructure investment firm said it had an “encouraging start” to the new financial year.

Frasers Group surged nearly 9 percent. The fashion and retail giant released targets for its current fiscal year above market forecasts.

Publicis Groupe jumped 4.6 percent. The French advertising group raised its organic growth target for 2024 after reporting better than expected results for the first half of the year.

Automakers surged after industry data showed new car sales in the EU recovered strongly in June, driven by gains in three out of the region’s four major markets.

New car registrations rose 4.3 percent year-over-year to 1.089 million units in June, reversing a 3.0 percent fall in May.

BMW jumped 1.9 percent, Mercedes Benz added 2.1 percent and Volkswagen rose 1.7 percent.

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