European Stocks Rise, ECB Hike Unwavering Sentiment
European stock markets closed higher on Thursday (June 11th) despite the European Central Bank (ECB) raising its benchmark interest rate. The Stoxx Europe 600 rose 0.7%, Germany's DAX gained 0.2%, the FTSE 100 added 0.5%, France's CAC rose 0.7%, and the Swiss Market Index closed 0.8% higher.
The ECB raised its three main interest rates by 25 basis points each. Starting June 17th, the deposit facility rate rose to 2.25%, the main refinancing operations rate to 2.40%, and the marginal lending facility rate to 2.65%. These increases were widely priced in by the market, so investors are more focused on the outlook for future policy.
Fundamentally, the ECB's decision indicates that the central bank still sees inflation risks that need to be controlled. However, the strengthening of European stocks indicates that the market is not yet interpreting this increase as significant pressure on equities, especially if the ECB does not signal further aggressive tightening.
On the corporate front, Ryanair drew attention after the UK competition authority investigated family seat fees charged to parents to allow them to sit with children aged 2–11. Ryanair stated that the policy complies with applicable regulations. The airline's shares rose 1.3% in Dublin.
BP shares rose 1% in London after the company announced a new, simpler organizational structure effective July 1, with two main segments: Upstream and Downstream. Meanwhile, Novartis gained 2.2% in Zurich after a phase I/II study of its experimental therapy met key primary and secondary targets, paving the way for a phase III study.
In the commodities sector, attention turned to BHP after workers at its Port Hedland operations in Western Australia agreed to strike action in negotiations for a new labor agreement. This potential disruption could be a significant factor for the mining supply chain if action actually begins in the coming days. (Arl)
Source: Newsmaker.id
