European Stocks Recover Amid Hawkish ECB Signals
European stocks rebounded on Thursday (April 30th) after a brief period of pressure, helped by a drop in oil prices from a four-year peak. The STOXX 600 index rose 0.9% at 12:59 GMT, snapping a four-day losing streak, while Germany's DAX gained 0.9% and Britain's FTSE 500 gained 1.1%.
The region's two major central banks, the ECB and the Bank of England, held interest rates steady as expected. However, the ECB signaled growing concern over soaring inflation, maintaining market speculation that more tightening could occur this year, with the first widely expected move in June.
However, currency markets slightly trimmed bets on an ECB rate hike in June, pricing in around 23 basis points compared to 25 basis points before the decision. The combination of lower oil and a still-tightening interest rate narrative makes the stock rally more based on sector rotation than a major shift in policy expectations.
Sector-wise, industrials and healthcare led the gains, rising around 1.7% each, while technology rose 1.3%. Rolls-Royce surged 9.2% after maintaining its earnings outlook, helping the defense index rise 3%, with AstraZeneca and Novo Nordisk also gaining 2.3% and 4.1%, respectively.
Headwinds persisted in financials, with the eurozone banking index falling 0.9% after French banks' trading results were deemed weak; BNP Paribas, Societe Generale, and Credit Agricole fell 2.6%, 3.6%, and 4.8%, respectively. Meanwhile, Universal Music Group fell 5.8% after reporting lower first-quarter revenue and plans to sell part of its Spotify stake, while Puma rose 7.2% after its quarterly performance beat expectations. (gn)
Source: Newsmaker.id
