European Markets Close Higher

European markets ended higher on Thursday with investors cheering the Fed’s pledge to continue its easy-money policies, and digesting the Bank of England’s monetary policy announcement.

The Bank of England today left its benchmark rate and quantitative easing unchanged, with its Monetary Policy Committee voting to hold the interest rate at 0.1% and the quantitative easing at GBP 895 billion.

The BoE’s monetary policy committee said it did not intend to tighten monetary policy at least until there was clear evidence that significant progress was being made in eliminating spare capacity and achieving the 2% inflation target sustainably.

On Wednesday, the Federal Reserve forecast stronger economic growth and higher inflation this year but indicated it expects to keep interest rates at near-zero levels through 2023.

The Fed also reiterated it plans to continue purchasing bonds at a rate of at least $120 billion per month until “substantial further progress” has been made toward its policy goals. The central bank said it expects U.S. GDP to soar by 6.5% in 2021 compared to the 4.2% spike forecast last December.

The European Medicines Agency, which concluded its safety review into the coronavirus vaccine developed by AstraZeneca and the University of Oxford Thursday, deemed it safe and effective after fears that it may cause blood clots.

Higher yields on long-term U.S. Treasury Notes limited the upside in some of the markets in the region.

The pan European Stoxx 600 ended 0.4% up. The U.K.’s FTSE 100 gained 0.25%, France’s CAC 40 edged up 0.13%, Germany’s DAX climbed 1.23%, while Switzerland’s SMI gained 0.47%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Iceland, Ireland, Netherlands, Poland, Portugal, Spain and Sweden ended higher, while Finland, Greece, Norway, Russia and Turkey closed weak.

In the UK market, Informa, DCC, Antofagasta, Evraz, Schrodders, HSBC Holdings, Smurfit Kappa Group, WPP, Entain, Standard Life, RightMove, Legal & General and Smith Ds gained 2 to 4%.

Ocado Group shares declined nearly 5% despite the online grocer reporting a 40% surge in sales in the last three months.

M&G slid more than 4%, while Spirax-Sarco Engineering, Compass Group, Rolls-Royce Holdings, Coca-Cola, Associated British Foods, Ferguson, Intertek and Just Eat Takeaway lost 1.6 to 2.5%.

In the French market, Societe Generale and ArcelorMittal both gained nearly 4%. Bouygues, BNP Paribas, Credit Agricole, Carrefour, Saint Gobain and Renault gained 1 to 3%, while Unibail Rodamco, Sodexo, Danone, Veolia, WorldLine and LOreal ended sharply lower.

In Germany, Deutsche Bank, Daimler, Siemens, Merck, Allianz and BASF gained 2.5 to 5%. Bayer, Munich RE, MTU Aero Engines, Covestro and Deutsche Post also closed notably higher.

Shares of pharmaceutical company Sartorius climbed more than 8% after the company raised its earnings guidance for 2021. Sartorius Stedim Biotech gained about 6%.

Data from Eurostat showed the euro area trade surplus fell to a seasonally adjusted EUR 24.2 billion from EUR 27.5 billion in December. Exports were down 2.8% month-on-month in January and imports dropped 1.3%.

Switzerland’s exports declined by a real 1.4% month-on-month in February, after rising 6% in January, data from the Federal Customs Administration showed. Exports fell 6.1% in December.

Imports rose 0.3% monthly in February, after a 1.8% increase in the previous month, the data showed.

A report from the Federal Statistical Office showed Switzerland’s producer and import prices decreased by 1.1% year-on-year in February. The producer price index declined 0.9% annually in February and import prices decreased 1.7%. On a monthly basis, producer and import prices remained unchanged in February.

European Central Bank President Christine Lagarde said at a hearing in the European Parliament today that the acceleration in buying bonds under its pandemic-era scheme will start to show in the long term.

The euro area economic outlook in the short term remains surrounded by uncertainty and preserving favorable financing conditions over pandemic period remains essential, the ECB chief said.

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