Equities Indices

European stocks rise amid confirmation of central bank stability

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European stocks are higher Thursday, as both the Bank of England and European Central Bank kept their respective interest rates on hold. Both central bank chiefs also signalled that they would retain a cautious and supportive stance as uncertain Brexit negotiations continue.

By 1420 BST, the EUROSTOXX 600 was 0.19% higher, while the EUROSTOXX 50 had gained 0.55%. Regional bourses were also higher. The German DAX rose 0.45%, the French CAC was 0.36% in the green and the Spanish IBEX was 0.72% in positive territory.

Central Bank decisions

The BOE announced its policy decision at midday Thursday. The central bank voted 9-0 to keep the UK’s key interest rate on hold at 0.75%. The decision comes as increased uncertainty threatens to dog the UK economy amid ongoing, uncertain Brexit negotiations.

“Since the committee's previous meeting, there had been indications, most prominently in financial markets, of greater uncertainty about future developments in the withdrawal process,” the minutes of its September meetings said, discussing Brexit.

The ECB, meanwhile, also announced that the key Euro Zone interest rate would remain unchanged at 0%. Speaking at the press conference after the policy announcement was made, ECB chairman, Mario Draghi also mentioned the rising uncertainty with regards to the ECB’s outlook.

“Uncertainties relating to rising protectionism, vulnerabilities in emerging markets and financial market volatility have gained more prominence recently,” Draghi said.

Under such circumstances, it seems likely that both central banks will keep rates steady and raise them only very slowly.

Stock movers

On the day two prominent central banks shared their current views on monetary policy, there were some stock movers that helped buoy the European indices.

Deutsche Bank shares rose 2.68% to €9.79 amid reports the German bank is considering a major overhaul and creating a holding company structure. Such a move would make it easier for the bank to agree a merger.

Volvo shares, meanwhile, are also higher Thursday, up 0.72% at SEK153.85. The Swedish car maker showcased a new autonomous, cab free truck it is developing that could be used extensively in the delivery and logistics industry.

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