European markets climbed higher on expectations the European Central Bank could signal fresh stimulus at its meeting later on Thursday.
The Stoxx 600 SXXP, +0.32% rose 0.2% in anticipation of ECB president Mario Draghi’s address and on hopes of an earlier-than-expected rate cut.
Disappointing German business sentiment data prevented the DAX DAX, +0.04% from making gains but the CAC PX1, +0.55% lifted 0.4%.
What’s moving the markets?
Expectations that the ECB will lay the foundations for further easing when it gives an update later on Thursday.
A September rate cut is considered likely but weak German manufacturing data on Wednesday has boosted the outside chances of a rate cut this month, sending stocks higher.
ING chief FX strategist Petra Krpata said: “We expect the ECB to change the forward guidance and signal upcoming cuts (in September and potentially beyond), thus cementing the markets’ dovish expectations.
“And we expect President Draghi to deliver a dovish press conference, with a potential hint at QE – the latter in particular should be a negative factor for the euro over coming months.”
German business sentiment also fell in July for the tenth time in the last eleven months, according to Munich’s closely followed Ifo index released on Thursday.
As a result the DAX was the weakest performing major European index, trading flat.
A series of strong second quarter earnings results also helped lift equity markets, including Budweiser brewer Anheuser-Busch ABI, +5.27% reporting its fastest beer sales growth in five years, and Danone enjoying a sales boost from a rebound in its China baby food business.
Which stocks are active?
British engineering company Cobham COB, +34.75% soared 35% after agreeing to a £4bn takeover by U.S. private equity firm Advent. The U.K. defence supplier’s shareholders will receive 165p per share in cash, a 34% premium to the closing price on Wednesday.
Nokia NOKIA, +5.88% shares climbed 5.7% after the Finnish telecoms firms posted an unexpected profit rise due to strong demand for 5G technology. The equipment maker said competition could intensify as its rivals look to cash in on the early stages of 5G deployment.
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