By Macarena Munoz Montijano and Allegra Catelli
September 12, 2024 at 12:53 PM GMT+7
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European stocks gained as traders’ attention turns to the European Central Bank’s decision today on interest rates.
The Stoxx 600 Index rose 1.3% at 8:12 a.m. in London, with technology and mining stocks advancing the most.
Gains in Europe follow advances in Asia and the US after data on Wednesday showed US inflation for August supported bets for a Federal Reserve rate cut next week.
Read more: ECB to Cut Rates But Stay Guarded on Path Beyond: Decision Guide
The ECB is expected to lower interest rates again, according to economists surveyed by Bloomberg, but will refrain from guiding on the pace and extent of further action as inflation isn’t yet fully tamed. The deposit rate will be cut by a quarter-point to 3.5%, economists say, after a first reduction in June followed by a pause in July.
Europe’s benchmark index has stumbled this month after rebounding in August as concerns about global growth weighed on stocks linked to the economic cycle and commodities such as oil.
“We don’t expect any surprise today as a 25 bps cut is almost certain, while officials will keep saying they are data-dependent and not compromise for future cuts,” said Diego Fernandez, chief investment officer at A&G Banco. “Overall this is still a reasonably positive scenario for markets as we are still on a positive moment on the cycle.”
Among single stocks, Commerzbank AG’s executive board is reviewing its defense strategy as it prepares for a potential takeover approach by UniCredit SpA. Meanwhile, Roche Holding AG’s shares slid after its closely-watched experimental obesity pill was tied to side effects, including nausea and vomiting.
SECTORS IN FOCUS
- European banks and real estate are among sectors that may be active Thursday ahead of the ECB’s rate decision
- European mining stocks could be active after aluminum rose for a second day, as investors focus on signs that demand is recovering in China and surging raw material costs. Other metals also gained, including copper, zinc and iron ore.
For more on equity markets:
- Rock-Bottom Valuations Not Enough to Boost Autos: Taking Stock
- M&A Watch Europe: Commerzbank, Capital & Regional, DSV, Swisscom
- Europe Banks Lead Block Trades on $2.2 Billion Day: ECM Watch
- US Stock Futures Little Changed; Oxford Industries Falls
- Under Asking: The London Rush
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