European Stocks Close Higher After Choppy Ride

(RTTNews) - European stocks closed higher on Thursday after a somewhat choppy ride with investors reacting to the monetary policy announcements from the Bank of England and the Federal Reserve, and closely following the developments on the geopolitical front.

The Bank of England today raised its key rate for the third straight meeting as inflation outlook worsened after the Russian invasion of Ukraine. Policymakers led by Governor Andrew Bailey decided to increase the key interest by 25 basis points to 0.75%.

The Federal Reserve raised its benchmark rate by 25 basis points on Wednesday and signaled further hikes during the course of this year.

On the Ukraine front, reports indicate some progress in diplomatic talks between Russia and Ukraine with both sides agreeing to Ukraine's "neutral" status.

The pan European Stoxx 600 moved up 0.45%. The U.K.'s FTSE 100 climbed 1.25% and France's CAC 40 ended 0.36% up, while Germany's DAX shed 0.36%. Switzerland's SMI advanced 1.35%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Ireland, Netherlands, Norway, Poland, Portugal, Spain and Turkey ended with sharp to moderate gains.

Finland, Greece, Iceland and Sweden closed weak.

In the UK market, Entain, Fresnillo, Smurfit Kappa, Halma, Rio Tinto, Shell, Airtel Africa and Experian gained 3 to 4.5%.

Diageo, Spirax-Sarco Engineering, St. James Place, Scottish Mortgage, Intertek Group, BAE Systems, Relx, Severn Trent, Coca-Cola HBC, 3I Group and GlaxoSmithKline gained 2 to 2.8%.

Ocado Group plunged more than 8% after Ocado Retail Ltd., a joint venture between Ocado and Marks & Spencer Group plc, reported a 5.7% decline in first-quarter revenue, against a challenging comparative and a 4% fall in UK grocery market sales.

Polymetal International declined by about 5.2%, M&G shed 4.1% and Natwest Group ended nearly 4% down. Barclays, Royal Mail, IAG, Pearson and Associated British Foods also ended sharply lower.

In the German market, Vonovia, Bayer, Fresenius Medical Care and RWE closed on a firm note.

HelloFresh shed about 4% and Continental ended 3.2% down. BMW, Munich RE, Infineon Technologies, Daimler, BASF, Siemens Healthineers, Allianz, Siemens and Deutsche Bank lost 1 to 2.5%.

German conglomerate Thyssenkrupp dropped more than 9% after Reuters reported quoting CEO that the war in Ukraine has forced the company to reassess its spending and potential spin-off of its steel division.

In Paris, Atos gained nearly 4%. Veolia gained about 2.2%. The French resource management firm reported Thursday higher results in fiscal 2021. Further, the company lifted dividend and said it sees higher results in fiscal 2022.

Pernod Ricard and Engie also gained more than 2%. Thales, Essilor and Dassault Systemes too ended notably higher.

Renault ended nearly 6% down. Faurecia lost 5.8%, BNP Paribas declined 2.5% and WorldLine ended 2.25% down. Safran, Unibail Rodamco, Valeo, Societe Generale and Air France-KLM also ended notably lower.

The Bank of England, which raised interest rate by 25 basis points today, had raised its rate by 0.15 percentage points at its December meeting and by 0.25 percentage point in February.

"The Committee judges that some further modest tightening in monetary policy may be appropriate in the coming months, but there are risks on both sides of that judgement depending on how medium-term prospects for inflation evolve," the bank said.

The BoE expects GDP to grow by around 0.75% in the first quarter of 2022, stronger than the February Report projection for a flat quarterly outturn. The bank expects inflation to rise further in coming months, to around 8% in the second quarter of 2022, and perhaps even higher later this year.

The bank said the effects of Russia's invasion of Ukraine would likely accentuate both the peak in inflation and the adverse impact on activity by intensifying the squeeze on household incomes.

In other economic news from Europe, passenger car sales in the region declined again in February as the manufacturers continued to face supply chain disruptions, according to the European Automobile Manufacturers' Association (ACEA).

Eurozone inflation rose more than initially estimated in February, final data from Eurostat showed on Thursday. Inflation advanced to a fresh record high 5.9% in February from 5.1% in January. The rate was revised up from 5.8%.

Core inflation that excludes energy, food, alcohol and tobacco, increased to 2.7%, in line with estimate, from 2.3% in the previous month.

On a monthly basis, the harmonized index of consumer prices moved up 0.9%, as estimated.

Switzerland's exports grew for a second straight month and at a faster pace of 8.1% in February, while imports declined, data from the Federal Customs Administration showed on Thursday. Exports were up 2% in January.

Imports decreased 0.9% monthly in February, after a 0.4% increase in the previous month. In nominal terms, exports grew 15.4% in February and imports decreased 2.9%.

The trade surplus increased to CHF 5.702 billion in February from CHF 1.950 billion in January.

According to the Federation of the Swiss Watch Industry, the watch exports grew 24.4% year-on-year in February.