European Stocks Close Mixed After ECB Hikes Rate By 50 Bps

(RTTNews) - European stocks turned in a mixed performance on Thursday with investors staying largely cautious, reacting to the European Central Bank's first rate hike in 11 years, and amid persisting concerns about slowing growth and rising inflation.

Meanwhile, Russia resumed natural gas supplies to Germany, helping to ease worries about fallout on the economy.

Markets also digested news about the resignation of Italian President Mario Draghi. The resignational has plunged into fresh political uncertainty following Draghi's resignation. The resignational comes after a number of parties in the governing coalition abstained from a vote of confidence that was aimed at renewing and re-uniting the fractious alliance.

The pan European Stoxx 600 moved up 0.44%. The U.K.'s FTSE 100 edged up 0.09%, France's CAC 40 gained 0.27% and Germany's DAX drifted down 0.27%, while Switzerland's SMI climbed 0.68%.

Among other markets in Europe, Austria, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands and Sweden ended higher.

Belgium, Norway, Poland, Portugal, Russia, Spain and Turkey closed weak.

The European Central Bank raised its interest rates for the first time in over a decade today, hiking it by a bigger-than-expected 50 basis points, and unveiled an anti-fragmentation tool called the Transmission Protection Instrument, or TPI.

ECB President Christine Lagarde had said in June that the bank would hike interest rates by 25 basis points in July and follow up with a similar, or bigger, move in September if the macroeconomic outlook deteriorated.

"The Governing Council judged that it is appropriate to take a larger first step on its policy rate normalization path than signaled at its previous meeting," the ECB said in a statement. "This decision is based on the Governing Council's updated assessment of inflation risks and the reinforced support provided by the TPI for the effective transmission of monetary policy."

The main refinancing rate was raised to 0.50% from zero and the deposit facility rate was hiked to zero from -0.50%. The marginal lending rate was lifted to 0.75% from 0.25%. Eurozone interest rates were last raised in July 2011.

Meanwhile, the Office for National Statistics said the UK budget logged its second biggest deficit for the month of June on record, as high inflation pushed up the debt servicing cost of government.

Public sector net borrowing excluding public sector banks increased by GBP 4.1 billion to GBP 22.9 billion in June, which was the second-highest June borrowing since monthly records began in 1993. This was GBP 0.6 billion more borrowing than the Office for Budget Responsibility had forecast.

In the UK market, Howden Joinery Group, 3I Group, Spirax-Sarco Engineering, ICP, Haleon Plc, Halma, Taylor Wimpey, Intertek Group, Experian, RS Group, Barratt Developments, Croda International and Persimmon gained 2.5 to 4.3%.

Harbour Energy plunged 5.65%. Dechra Pharmaceuticals, Avast, BAE Systems, SSE, IAG, National Grid and GSK ended lower by 1.5 to 3%.

Ocado Group shares declined sharply after the company reported a wider loss in its first-half.

In the French market, Publicis Groupe rallied about 5%. Schneider Electric, CapGemini, Legrand, Teleperformance, Pernod Ricard, Hermes International and STMicroElectronics gained 1 to 2.5%.

Atos ended more than 5% down. Accor and Faurecia ended lower by about 3% and 2.7%, respectively. Unibail Rodamco, Credit Agricole, Orange, Air France-KLM, Sodexo and Sanofi also closed notably lower.

In ther German market, Sartorius climbed more than 6% after the company confirmed its FY22 outlook after reporting a 77% surge in first-half profit.

Merck advanced 5.3%, while Siemens Healthineers, Qiagen, Brenntag, Puma, Symrise, Infineon Technologies and Vonovia gained 1.4 to 4%.

HelloFresh plunged nearly 14%. E.ON, SAP, Volkswagen, RWE, Fresenius Medical Care, Bayer, BASF and Covestro lost 2 to 4%.

Finnish telecom equipment maker Nokia surged 9% after reporting better-than-expected earnings for the second quarter and backing its FY22 outlook.