A rally in bank stocks for the first time in four sessions lifted European shares on Thursday, after the U.S. Federal Reserve cut interest rates but set a higher bar for further reductions.
European banks rose 1.4%, the most among the major sectors, also benefiting from investors rotating into underperforming stocks. Banks are the only major sector in the red so far this year.
Central banks around the world have been loosening monetary policy to stem a slowdown in economic growth. Last week, the European Central Bank cut interest rates deeper into negative territory and asked governments to do more to prop up the euro zone economy.
However, upbeat economic data last week has resulted in central banks taking a more guarded approach to rate cuts. Following mixed signals from Fed Chair Jerome Powell, all eyes are now on the Bank of England’s policy move, due at 11:00 GMT, where it is expected to stand pat on rates.
The pan-European STOXX 600 index gained 0.2%, with lender-heavy Milan and Madrid outperforming.
Source : Reuters