BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks closed broadly higher on Thursday despite paring most of their early gains, after the European Central Bank left its interest rate unchanged for the first time in a year.
The ECB held its key interest rates steady, in line with expectations, as policymakers assessed that price pressures continue to ease, but acknowledged that the economic environment remains highly uncertain mainly due to the trade tariff wars.
The Governing Council, led by ECB President Christine Lagarde, kept the deposit rate unchanged at 2%. The refinancing rate was retained at 2.15% and the marginal lending rate at 2.4%.
The previous change in euro area interest rates was a 25-basis point reduction in June. The bank had cut interest rates by a quarter basis points each in every rate-setting session since September.
The ECB said that the euro area economy has so far proven resilient in a challenging global environment, which still is exceptionally uncertain, mainly because of trade disputes.
The markets had gained in some strength earlier in the day amid growing optimism the U.S. and the European Union will strike a trade deal before the August 1 deadline.
The U.S. and EU are heading towards a deal that will see implementation of 15% tariffs on select European imports, as well as scrapping of some duties.
Investors also reacted to a slew of corporate earnings updates, and regional economic data.
The pan European Stoxx 600 gained 0.24%. The U.K.'s FTSE 100 climbed 0.85%, Germany's DAX closed up 0.23% and France's CAC 40 drifted down 0.41%. Switzerland's SMI ended 0.26% down.
Among other markets in Europe, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Turkiye closed higher.
Russia ended weak, while Austria closed flat.
In the UK market, BT Group zoomed 10.5% after naming Patricia Cobian, currently with rival Virgin Media O2, as its first female chief financial officer.
Reckitt Benckiser surged nearly 10% after the consumer healthcare and hygiene power-house upgraded its full-year guidance after a strong performance in the first-half.
Howden Joinery soared nearly 9%, buoyed by strong first-half earnings. The company said that its pre-tax profit rose 4.4% to 117 million pounds for the six months ended June 2025.
Airtel Africa rallied 7.3%. Ashtead Group, Diploma, JD Sports Fashion, Diploma, Rentokil Initial and AstraZeneca gained 2 to 4%.
Vodafone Group gained nearly 3% after the telecommunications company launched a €500 million share repurchase program that will run through November 10, 2025.
SSE ended lower by about 3.1%. Beazley, Fresnillo, 3i Group, BP, Severn Trent, Endeavour Mining, United Utilities, Melrose Industries and Glencore also ended notably lower.
In the German market, Deutsche Bank soared more than 9% on strong earnings. The bank reported second-quarter profit of 1.49 billion euro, compared to prior year's loss of 143 million euros. Profit before tax was 2.42 billion euros, significantly higher than last year's 411 million euros. Looking ahead, for fiscal 2025, the bank continues to expect revenues of around 32 billion euros.
Deutsche Telekom climbed about 5%. Siemens Healthineers, Commerzbank, Bayer, Qiagen, Puma, BASF, Deutsche Post and Merck gained 1 to 3%.
MTU Aero Engines closed lower by about 5%. The company reported first-half net income of 513 million euros, up 78% from last year. Adjusted earnings per share was 8.76 euros, up 39%. Revenue was 4.20 billion euros, up 24%. Adjusted revenue was 4.14 billion euros, an increase of 21%.
MTU confirmed its guidance for fiscal 2025, which it raised in mid-June.
Infineon Technologies drifted down by about 4%. Rheinmetall and RWE also ended sharply lower.
In the French market, Eurofins Scientific rallied 4%. Credit Agricole, Pernod Ricard, Societe Generale, Publicis Groupe, Schneider Electric, Orange, Legrand and Teleperformance gained 1 to 2.2%.
BNP Paribas ended modestly higher thanks to stronger than expected earnings report for the second-quarter.
STMicroElectronics tanked nearly 17% after it swung to a loss in Q2 on lower revenue. Dassault Systemes closed more than 8% down.
TotalEnergies ended lower by more than 3%. The integrated energy company said its net profit plunged in the second quarter despite increased output.
Stellantis, LVMH and Michelin also ended sharply lower.
In economic news, consumer confidence in Germany is set to deteriorate in August as households preferred to save rather than spend due to the escalating uncertainty, survey data from the market research group GfK revealed.
The Consumer Climate indicator dropped unexpectedly to -21.5 points in August from -20.3 points in July. The score was forecast to improve to -19.4.
The euro area private sector grew at the fastest pace in almost a year in July as the recession in the manufacturing sector is coming to an end, flash survey results from S&P Global revealed.
The HCOB composite output index posted 51.0 in July, up from 50.6 in the previous month. The score was forecast to climb to 50.8.
Output across the manufacturing and services sectors expanded in July. For the first time in four months, the services category posted the stronger pace of growth, while manufacturing output grew only marginally.
The services Purchasing Managers' Index advanced to 51.2 from 50.5 in June. The score was forecast to edge up to 50.6.
At 49.8, the manufacturing PMI improved to a 36-month high from 49.5 in the previous month. The score was seen at 49.7.
The survey showed differing trends across the various areas of the euro area. Germany logged a marginal increase in output for the second straight month. Meanwhile, activity decreased again in France but at the slowest pace in the current 11-month sequence of decline.
France's private sector economy continued to deteriorate with activity contracting for an eleventh consecutive month. The flash composite output index advanced to 49.6 from 49.2 in June. The score was forecast to fall to 49.3.
The services PMI edged up to 49.7, in line with the forecast, and up from 49.6 in the previous month. The factory PMI registered 48.4 compared to 48.1 in June and expectations of 48.5.
Germany's private sector growth softened in July. Higher production levels were recorded in manufacturing, which was partially offset by a stabilization of activity in the service sector.
The composite output index fell to 50.3 in July from 50.4 in the previous month. The score was forecast to climb to 50.7.
At 50.1, the services PMI hit a four-month high from 49.7 in June. The factory PMI advanced to 49.2 from 49.0.
UK private sector output continued to grow in July but the pace of expansion moderated as services activity lost momentum, flash survey results from S&P Global revealed on Thursday.
The composite output index slid to 51.0 in July from 52.0 in June. The reading was also above the forecast of 51.9.
The services Purchasing Managers' Index registered 51.2 in July, down from 52.8 in the previous month. The score was forecast to remain unchanged at 52.8.
The factory PMI improved to 48.2 in July from 47.7 a month ago. The score was seen at 48.1.
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