Article Highlights

  • STOXX 600 up 0.3 pct
  • ECB to end bond buys, keep rates steady through next summer
  • Miners weighed down by China data
  • Rolls Royce eyes savings, shares up
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European shares rose on Thursday, reversing initial losses after the European Central Bank said interest rates would stay at record lows at least through the summer of 2019 as it announced an end to its massive stimulus plan.

The pan-European STOXX 600 and the euro zone were both up 0.3 percent at 1211 GMT, while the exporter-heavy German index gained 0.4 percent as the euro fell to a session low following the ECB’s statement.

“The hawks had been guiding for a June hike before the meeting and given the clear guidance the ECB gave today on interest rates, it had to be priced out,” said AFS Group analyst Arne Petimezas.

“It doesn’t seem like we’re at the stage where the hawks are on top of things,” he added.

Interest-rate sensitive sectors such as autos and utilities gained, while banking stocks, which tend to gain from higher interest rates, fell briefly before turning positive once again in volatile trade.

Most sectors recovered from their earlier lows but basic resources stocks, down 1.1 percent, remained under pressure following weaker-than-expected data from big metals consumer China that sent copper prices near one-week lows.

Shares in miners Glencore, Rio Tinto and BHP Billiton fell between 1 and 1.6 percent.

Shares in heavyweight drugmaker GSK rose 2 percent. Investors welcomed news its two-drug treatment for HIV met its main goal in late stage studies – a boost after regulators warned of possible birth defects from one of the two drugs.

Rolls-Royce gained 3.8 percent after saying it would save 400 million pounds ($535 million) a year by cutting 4,600 jobs in its latest attempt to simplify the business and generate more cash.

“After spending around four and half years in purdah, an incremental 400 million pounds of FCF (free cash flow) would allow Rolls-Royce to take a significant step toward meeting its financial targets,” Jefferies analysts said.

“That should then mean Rolls-Royce can make an adequate annual return to shareholders through the dividend,” they added.

Aveva was the biggest gainer on the STOXX, up 11.5 percent to a record high, after strong results from the British engineering software company.

On the DAX, Volkswagen rose 1 percent. It fell in early trading after the carmaker was fined one billion euros over diesel emissions cheating.