European equity markets traded higher on Thursday as investors assessed another wave of corporate earnings while weighing the implications of the U.S. Federal Reserve’s decision to leave interest rates unchanged following a closely divided 9-3 vote.
Bank of England Holds Rates Steady
In the latest monetary policy decision, the Bank of England kept its benchmark interest rate unchanged, in line with market expectations.
The Monetary Policy Committee, chaired by Governor Andrew Bailey, voted 6-3 to maintain the bank rate at 3.75%, its lowest level since June 2023.
French Economy Returns to Growth
Fresh economic data showed that France avoided slipping into recession during the second quarter as stronger consumer spending and exports supported economic activity.
Preliminary figures from INSEE showed gross domestic product expanded by 0.2% compared with the previous quarter, reversing the 0.1% contraction recorded in the first quarter and matching economists’ forecasts.
Separate data also indicated that French household spending accelerated in June, helped by increased expenditure on food and energy.
Major European Indices Trade Higher
The French CAC 40 gained 0.9%, while the UK’s FTSE 100 advanced 0.4%. Germany’s DAX also moved higher, rising 0.1%.
Rolls-Royce Leads UK Market Higher
Among individual stocks, Rolls Royce Holdings (LSE:RR.) climbed more than 4% after the engineering group upgraded its full-year profit outlook following a strong first-half operating and financial performance.
Shell (LSE:SHEL) added around 1% after reporting that second-quarter profit more than doubled.
BAE Systems (LSE:BA.) rose 1.1% after lifting its full-year guidance for sales, profitability and cash flow following a strong first half.
Lloyds Banking Group (LSE:LLOY) gained nearly 2% after unveiling further cost-cutting measures, increasing its interim dividend and announcing a new £1 billion share buyback following a 23% rise in first-half profit.
European Companies Deliver Mixed Results
Dutch banking group ING (EU:INGA) advanced 2% after posting better-than-expected second-quarter earnings and improving its outlook.
Stellantis (BIT:STLAM) fell 5.3% after adjusted operating income for the second quarter missed market expectations.
French infrastructure company Vinci (EU:DG) jumped nearly 5% after exceeding forecasts for first-half profit and free cash flow, supported by strong momentum in its Energy Solutions division.
Veolia (EU:VIE), a global environmental services provider, gained 1.7% after reporting solid first-half earnings and raising its full-year profit guidance.
Capgemini (EU:CAP) declined 1.7% after announcing a sharp drop in first-half net profit.
Air France-KLM (EU:AF) rose 1.5%, while Deutsche Lufthansa edged higher after both airlines submitted offers to acquire a controlling interest in TAP Air Portugal.
Hotel operator Accor (EU:AC) slipped 1.3% after reporting a slight decline in second-quarter revenue per available room.
Bouygues (EU:EN) surged 7% after publishing improved first-half financial results.
Schneider Electric (EU:SU) rallied 6.4% after delivering record first-half revenue and free cash flow.
Sanofi (EU:SAN) fell 3.6% despite raising its full-year sales guidance.
Societe Generale (EU:GLE) climbed 2.4% after announcing plans to begin a €1.5 billion share buyback programme as early as August 3.
Adidas Slides While BMW Gains
Adidas (TG:ADS) plunged more than 17% after higher marketing spending related to the football World Cup weighed on quarterly profit.
Meanwhile, BMW (TG:BMW) gained 1.7% after reporting a second-quarter automotive profit margin that came in slightly ahead of expectations.
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