European stocks rise as ECB confirms end of bond buying; Ericsson down 5%

European stocks rise as ECB confirms end of bond buying; Ericsson down 5%


The pan-European Stoxx 600 nudged 0.5% higher by mid-afternoon, with travel and leisure stocks gaining 2.5% while telecoms dropped 0.4%.

The ECB kept its monetary policy unchanged but confirmed it will end its bond buying in the third quarter. Once the bond buying program is completed, the ECB is expected to begin hiking interest rates, following the same path as the Bank of England and the U.S. Federal Reserve.

“With market-implied pricing already pointing to a July rate lift-off and a total of three rate hikes this year, we see limited scope for any hawkish rhetoric to push pricing higher.”

Gurpreet Gill

Macro Strategist, Goldman Sachs Asset Management

“Any adjustments to the key ECB interest rates will take place some time after the end of the Governing Council’s net purchases under the APP and will be gradual,” the ECB’s Governing Council said.

Gurpreet Gill, macro strategist at Goldman Sachs Asset Management, said the next milestone in the ECB’s policy normalization program will be a decision on the pace of asset purchases next quarter, and that this will likely be the focus at the central bank’s July meeting.

“With market-implied pricing already pointing to a July rate lift-off and a total of three rate hikes this year, we see limited scope for any hawkish rhetoric to push pricing higher,” she added.

In terms of individual share price movement, Hungary’s Wizz Air climbed 8.3% after its post-close trading statement. Atlantia gained 4.5% after the Benetton family and U.S. investment firm Blackstone tabled an offer for the Italian road and rail firm.

Swedish telecoms company Ericsson dropped 5% after warning that it will likely be fined by U.S. regulators for its handling of a bribery investigation in Iraq. The company also reported a fall in quarterly earnings following its exit from Russia.

Investors in Europe are also monitoring the war in Ukraine. A Russian missile cruiser was attacked and damaged by Ukrainian forces in the Black Sea early on Thursday, forcing the entire crew to be evacuated.

U.S. President Joe Biden announced another $800 million in weaponry for Ukraine on Wednesday, following an hour-long phone call with the country’s president, Volodymyr Zelenskyy.

In other news, a sixth Covid-19 vaccine has been approved in the U.K., after the country’s health regulator gave the green light to French company Valneva’s shot.

Stock picks and investing trends from CNBC Pro:

Shares in Asia-Pacific were mostly higher on Thursday as investors reacted to monetary policy tightening announcements by central banks in South Korea and Singapore.

Stateside, stock futures were mixed in early premarket trade ahead of earnings announcements from the largest U.S. banks, including Wells Fargo, Goldman Sachs, Morgan Stanley and Citigroup.

JPMorgan Chase said Wednesday that first-quarter profit fell sharply from a year earlier, driven by increased costs for bad loans and market upheaval caused by the Ukraine war.

Carolina Moura-Alves, head of asset allocation at Quintet Private Bank, told CNBC on Thursday that banks would not benefit as much from the impending rate hiking cycle as they had in previous ones. By contrast, she suggested that tech stocks could offer an upside surprise.

“There are a few challenges and the result JPMorgan put forward yesterday, I really talk about late cycle dynamics which perhaps will not be as favorable for banks as previous hiking cycles in history,” Moura-Alves said.

“Tech suffered from the repricing of the yield curve from the higher discount rate because it is a longer duration sector, compared to other sectors in equity markets, and as we now approach a situation where the market has a good handle on how the Fed will go going forward, repricing has happened and perhaps there is even an opportunity for some dovish surprises down the line.”

Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.



Source

European markets are set to open higher ahead of flash inflation data
World

European markets are set to open higher ahead of flash inflation data

Here are the opening calls London was the No. 2 most-visited city in the world for 2023, according to Euromonitor International. Karl Hendon | Moment | Getty Images Good morning from London and welcome to CNBC’s live blog covering all the action in European financial markets, as well as business news, analysis, earnings and data. […]

Read More
How tourists alerted this fund manager to sell Moncler before its stock plunge
World

How tourists alerted this fund manager to sell Moncler before its stock plunge

In February, while luxury brand Moncler was still basking in the glow of a stellar 20% share price surge from January, fund manager Giles Parkinson made a contrarian move: he sold out. His decision, driven by subtle signals in tourist spending data, ultimately proved to be the right one. By the end of March, Moncler’s […]

Read More
China’s May factory activity unexpectedly shrinks, clocking its worst drop since 2022: Caixin
World

China’s May factory activity unexpectedly shrinks, clocking its worst drop since 2022: Caixin

JIMO, CHINA – MAY 21: Car bodies are assembled at a factory of FAW-Volkswagen Automotive Co., Ltd Qingdao Branch on May 21, 2025 in Jimo, Qingdao City, Shandong Province of China. Visual China Group | Getty Images China’s manufacturing activity in May shrank at its fastest pace since September 2022, a private survey showed Tuesday, […]

Read More