European Stocks Move Lower

European stocks moved lower on Thursday, with both the STOXX 50 and STOXX 600 falling 0.3%, reversing early opening gains and extending losses of more than 1% in the previous session. Investors assessed the ECB’s latest policy decision, with policymakers raising rates by 25bps as expected while upgrading their growth and inflation forecasts. The ECB also warned that the Middle East conflict was continuing to fuel inflationary pressures, with inflation expected to remain above target for an extended period. Meanwhile, oil prices continued to rise, with Brent trading above $102 a barrel. Technology stocks were among the worst performers ahead of Oracle’s earnings, which are expected to provide further clues on the AI outlook. ASML fell more than 2%, while SAP declined 2.5%.

European stocks edged higher on Thursday, with the STOXX 600 gaining around 0.2% and the STOXX 50 also up 0.2%, following losses of more than 1% in the previous session. Investors await the ECB’s monetary policy decision later in the day, with markets widely expecting a 25bps rate hike. The focus will be on ECB President Christine Lagarde’s guidance on the policy outlook, particularly whether policymakers signal that further rate increases could be needed as inflationary pressures intensify. Surging energy prices have complicated the outlook, with Brent crude trading above $101 a barrel. Banking stocks were among the stronger performers, with Societe Generale rising around 1.6%, Deutsche Bank gaining 1.3% and Banco Santander adding 0.7%. In contrast, the tech sector was under pressure, with ASML losing 1.1%. SAP was among the biggest decliners, falling around 3%.

European equity markets were poised to open higher on Thursday as investors prepared for the European Central Bank’s upcoming policy decision, with the central bank widely expected to deliver its second 25 basis point rate hike of the year. Traders also turned their attention to key US inflation data that could cement expectations for a Federal Reserve rate increase next week. Meanwhile, markets continued to contend with elevated oil prices amid the intensifying conflict between the US and Iran, fueling inflation concerns and reinforcing expectations for near-term rate hikes. Elsewhere, investors will monitor Germany’s final August inflation figures, along with July industrial production data from Italy and Spain. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures gained 0.3% and 0.1%, respectively.