European shares rebound on tech boost; FTSE slips on BoE inflation warning

1:03 pm Thursday, November 07th, 2024

By Shashwat Chauhan and Shubham Batra

(Reuters) -European stocks regained ground on Thursday, boosted by technology and resources shares, while Britain’s FTSE 100 dipped after the Bank of England cut interest rates but projected higher inflation following the new government’s first budget.

The pan-European STOXX 600 closed 0.7% higher, powered by a 2.2% bounce in the tech sector, recouping losses from the previous session. Autos also added 2.2% after a more than 2% decline on Wednesday.

The basic resources index supported gains, rising 3.9% for its best day in six weeks following a rebound in base metal prices. [MET/L]

The FTSE 100 was the only stock index among major European benchmarks that ended in the red, down 0.3%.

The BoE said the government’s plans were likely to add almost half a percentage point to inflation at its peak in just over two years’ time and cause it to take a year longer to return sustainably to the central bank’s 2% target.

Investors will now shift their focus to the U.S. Federal Reserve’s interest rate decision at 1900 GMT.

Europe’s STOXX 600 gained as much as 1.9% in the previous session, tracking a surge on Wall Street after Donald Trump recaptured the U.S. presidency, although the index closed lower as investors assessed the likelihood of tariffs.

Among other movers on Thursday, ArcelorMittal gained 6.5% after the world’s second-largest steelmaker reported third-quarter core profit above market expectations.

Italy’s third-largest lender Banco BPM climbed 9% on plans to launch a bid for full control of asset manager Anima Holding in a deal worth up to 1.6 billion euros ($1.7 billion). Shares of Anima jumped 11.1%.

Dutch fintech company Adyen slipped 3% after reporting third-quarter processed volume below market expectations, while British broadcaster ITV lost 12.9% after posting a worse than expected fall in revenue in the nine-months ended Sept. 30.

Daimler Truck gained 3.1% after the truckmaker reported a marginally better than expected third-quarter core profit.

GERMANY FACES SNAP ELECTION

Germany’s ruling coalition collapsed as Chancellor Olaf Scholz sacked his finance minister and paved the way for a snap election, triggering political chaos in Europe’s largest economy. The German benchmark index was up 1.7%.

Arms group Rheinmetall shares rose 9%, leading a rally in aerospace and defence stocks, on bets the election of Trump and the sacking of Germany’s fiscally conservative finance minister could boost defence spending. “This perceived shift in Germany’s approach to fiscal constraints could fuel optimism about defense spending plans, with Rheinmetall seen as well-positioned to capture this,” said Matthew Tuttle, CEO of Tuttle Capital Management.

(Reporting by Shashwat Chauhan and Shubham Batra in Bengaluru; Editing by Sherry Jacob-Phillips and Mark Potter)