European stock markets advanced on Thursday, with the STOXX 600 rising 0.5% in morning trading as investors assessed the outcome of the US midterm elections, declining energy prices and corporate earnings announcements.
The pan-European index extended gains following Wednesday’s session, when it recorded its largest single-day increase since June, and traded near its highest levels since August.
The election results, which gave Democrats control of both chambers of the US Congress, contributed to expectations of changes in American trade and economic policy. Oil prices also declined, while European investors continued to monitor monetary policy developments and political demonstrations in France.
Technology infrastructure companies attracted attention following earnings updates, including French electrical equipment manufacturer Legrand (EU:LR), which raised its annual sales growth forecast.
European Indices Advance Across Major Markets
European equities recorded gains across several national markets during Thursday’s morning session.
France’s CAC 40 and the UK’s FTSE 100 both advanced 1%, while Spain’s IBEX 35 increased 0.9%.
Italy’s FTSE MIB rose 0.3%, and the STOXX 600 gained 0.5%.
The movements followed Wednesday’s advance, which represented the STOXX 600’s largest daily percentage gain since June.
Investors continued to evaluate quarterly earnings alongside developments in US economic policy and the outlook for European interest rates.
US Midterm Elections Influence Market Expectations
The US midterm elections resulted in Democrats securing control of both chambers of Congress.
The outcome prompted investors to reassess the prospects for additional trade tariffs and fiscal policy measures.
Market participants considered whether the new congressional balance could limit certain trade initiatives and reduce the likelihood of further inflationary policy measures.
Global crude oil prices declined following the election results, providing a potential reduction in energy costs for European businesses and consumers.
Lower energy prices can influence operating expenses across manufacturing, transport and other energy-intensive industries.
The election results also coincided with gains across international equity markets.
Legrand Shares Gain 3.4% After Raising Sales Outlook
French electrical equipment manufacturer Legrand (EU:LR) rose 3.4% after increasing its full-year 2026 sales growth target for the second time this year.
The company cited demand for electrical distribution equipment and cable management systems used in data centres.
Investment in artificial intelligence infrastructure has supported demand for equipment required to power and connect computing facilities.
Legrand’s revised outlook reflected the contribution of data centre-related activity to its sales performance.
The announcement drew attention to companies supplying physical infrastructure for artificial intelligence applications.
Arm Holdings Declines Following Revenue Forecast
Arm Holdings (NASDAQ:ARM) shares declined 4% following the publication of its revenue outlook.
The semiconductor technology company forecast third-quarter revenue marginally above Wall Street expectations.
The share price movement came as investors continued to assess earnings and forecasts across the semiconductor and artificial intelligence supply chain.
Germany’s DAX also faced pressure during the session, although the reported movement in Arm shares did not establish a direct contribution to the German index.
Bank of England Rate Decision in Focus
Investors in London awaited the Bank of England’s interest rate announcement on Thursday.
Market expectations pointed to a 25-basis-point increase in Bank Rate to 4.00%, which would represent the central bank’s first rate increase in three years.
The anticipated decision followed inflationary pressures associated with the prolonged conflict involving the United States and Iran.
Higher imported energy and commodity costs have contributed to concerns about inflation in the United Kingdom.
Investors also monitored monetary policy developments at the Federal Reserve and the European Central Bank.
The expected Bank of England decision remained an important consideration for UK equities, sterling and interest-rate-sensitive sectors.
Diageo Shares Rise 5% Following Revenue Update
British drinks company Diageo (LSE:DGE) gained 5% after reporting first-quarter revenue above analysts’ expectations.
The company’s results attracted investor attention during a session marked by broader gains in UK equities.
The share price increase followed the revenue announcement, although the source did not provide additional financial figures or revised guidance.
Diageo’s performance contributed to company-specific movements within the London market.
French Demonstrations and Public-Sector Strikes Continue
Investors also monitored developments in France, where large demonstrations and public-sector strikes took place on Thursday.
Hundreds of thousands of protesters gathered in major cities, while industrial action disrupted public transport, education and municipal services.
The demonstrations followed several weeks of political and social tensions affecting President Emmanuel Macron’s administration.
The protests took place approximately five months before the next French presidential election, adding a domestic political consideration for investors assessing the French market.
Despite the demonstrations, the CAC 40 advanced 1% during morning trading.
European Market Outlook
Thursday’s gains across European equities reflected a combination of corporate earnings announcements, lower energy prices and changing expectations following the US midterm elections.
Legrand’s revised sales outlook highlighted demand for data centre infrastructure, while Diageo’s revenue performance supported its share price.
Investors also continued to assess the expected Bank of England interest rate decision and the potential economic effects of ongoing demonstrations in France.
The STOXX 600’s advance extended the previous session’s gains, with European markets trading near their highest levels since August.
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