Europe's benchmark index closed at a record high on Thursday, led by real estate stocks, as investors priced in more monetary policy easing by the European Central Bank this year and assessed a mixed bag of corporate results.
The ECB lowered borrowing costs by an expected 25 basis points to 2.75% and kept the door open to further policy easing as concerns over lacklustre economic growth superseded worries about persistent inflation.
The decision came on the heels of data showing the euro zone economy unexpectedly stagnated last quarter. Traders now expect about 70 bps worth of rate cuts by year-end.
"A well-telegraphed, widely expected move. A March cut should not be contentious either, but after that, the hawks will need convincing. I am expecting a pause in April," said Arne Petimezas, director of research at AFS Group.
The central bank's move contrasts the U.S. Federal Reserve's verdict to leave rates unchanged on Wednesday.
The pan-European STOXX 600 (.STOXX), opens new tab closed 0.9% higher, logging its 10th advance in the past 12 sessions. Germany's blue-chip index (.GDAXI), opens new tab rose 0.4%, also to touch an all-time high.
Rate-sensitive real estate stocks (.SX86P), opens new tab added 1.9% as yields on German bonds declined, with the two-year note at its lowest since Jan. 8.
Leg Immobilien (LEGn.DE), opens new tab and Tag Immobilien (TEGG.DE), opens new tab rose 4.6% each, further aided by rating upgrades by brokerage HSBC.
Indexes tracking mid-cap (.MCXP), opens new tab and small-cap companies (.SCXP), opens new tab added 1% and 1.1%, respectively.
Technology stocks (.SX8P), opens new tab rose for the third-straight day, up 1.1% as the sector continued to recover from a sell-off earlier in the week triggered by the emergence of Chinese firm DeepSeek's cheaper AI model.
However, advances were limited by STMicroelectronics' (STMPA.PA), opens new tab 10.7% drop after one of Europe's largest chipmakers forecast that sales in the first quarter of 2025 would likely drop further.
Also bucking the trend, Deutsche Bank (DBKGn.DE), opens new tab fell about 3.2% after Germany's largest lender posted a bigger-than-expected drop in fourth-quarter and 2024 full-year profit.
Meanwhile, Spain's IBEX index (.IBEX), opens new tab rose 1% to its highest since the 2008 financial crisis on the back of strong bank earnings from Caixabank and BBVA (BBVA.MC), opens new tab.
Nokia (NOKIA.HE), opens new tab jumped 6.7% after it reported stronger than expected fourth-quarter adjusted operating profit and sales, and was upbeat about 2025 prospects.
In M&A news, ITV (ITV.L), opens new tab jumped 3.6% after a report said the British TV broadcaster has been holding early stage talks with Abu Dhabi-backed group RedBird IMI about a possible merger of their respective production businesses. The broader media sector (.SXMP), opens new tab added 1.9%.(Cay) Newsmaker23
Source: Reuters
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