European shares saw a robust ascent on Thursday, propelled by a rally in energy stocks. Investors absorbed the minutes from the European Central Bank’s (ECB) October meeting, revealing policymakers’ cautious optimism regarding a decline in inflation across the Eurozone.
The pan-European STOXX 600 advanced by 0.3%, extending its gains and reaching a fresh two-month high.
Leading the sectoral gains, the energy sector surged by 1.4%, bouncing back from two consecutive sessions of significant losses.
In addition, healthcare stocks climbed by 0.7%, with Novo Nordisk (NYSE:NVO) witnessing a 1.0% increase after announcing a substantial $2.3 billion investment to enhance the production of its widely sought-after weight-loss and diabetes drugs.
The accounts of the Oct. 25-26 ECB meeting highlighted that Eurozone inflation is falling as anticipated, or perhaps slightly faster. However, policymakers emphasized the need to keep the option of an interest rate hike on the table.
Carsten Brzeski, Global Head of Macro at ING Economics, noted, “The minutes underline the ECB’s more cautious take on the economy and, in fact, mark the next phase of monetary policy tightening: ending rate hikes and focusing on ‘high for longer.'”
Investors also digested data from the Eurozone Composite Purchasing Managers’ Index, indicating a moderation in business activity for November. This suggests the Eurozone’s economy may contract again in this quarter as consumer spending remains restrained.
Amsterdam’s AEX rose by 0.3% following a surprising victory by far-right politician Geert Wilders in the Netherlands’ parliamentary election. Hubert de Barochez, Markets Economist at Capital Economics, commented, “While the Freedom Party’s victory in the Dutch parliamentary election was a big surprise, there is in our view only a very small probability that it will have a substantial impact on financial markets.”
Simultaneously, Sweden’s primary stock index increased by 0.5% after the Riksbank, its central bank, opted to maintain its policy rate at 4%.
In terms of individual stocks, Endesa experienced a 2.4% decline after the Spanish utility revised its 2023 profit outlook downward. Virgin Money (LON:VM) UK slid by 6.5% as it reported annual profit below market estimates.
On a positive note, France’s LDC gained 3.9% after the poultry producer posted a higher net profit for the first half-year and raised its annual forecast.
