By Johann M Cherian and Tristan Veyet
(Reuters) – European shares rose on Thursday, led by technology stocks after the U.S. Federal Reserve lowered borrowing costs for the first time since December, while shares of SIG plummeted following a profit warning.
The pan-European STOXX 600 rose 0.67% to 554.32 points, as of 0822 GMT in broad based gains.
Tech stocks climbed 2.1%, with the sector showing signs of recovery after falling about 7% over July-August. Tech-related stocks in parts of Asia also advanced following the Fed’s decision.
Late on Wednesday, the U.S. central bank cut interest rates by an expected quarter of a percentage point, its first dovish policy move since December.
However, the Fed also indicated that it will take a measured approach to lowering borrowing costs for the rest of this year, dampening expectations of more aggressive easing.
“Even though it wasn’t as dovish as expected, at the end of the day, more rate cuts are expected and that’s just going to be good for the general stock market,” said Daniela Hathorn, senior market analyst at Capital.com.
Elsewhere in Europe, Norway’s central bank followed the Fed with a 25-basis-point interest rate cut, while the Bank of England is expected to leave rates steady later in the day.
It was not a strong day for all stocks. SIG Group slid 20% and triggered a trading halt after the Swiss packaging group issued a profit warning for 2025 and suspended its cash dividend.
Britain’s Next also lost 5.4% after the fashion retailer said it expects UK sales growth to slow in the second half of the year.
Capital.com’s Hathorn also said that the focus is now on developments in the fiscal setting and any sign of potentially slowing growth, especially out of Germany.
Investors in Europe are scrutinizing how domestic governments such as Germany and France could shore up economic growth through fiscal spending at a time when worries prevail about ballooning government debt in the developed world.
Among others, Continental fell 20%, as the tire maker spun off auto supplier Aumovio, listed on the Frankfurt Stock Exchange at 35 euros per share.
Novo Nordisk rose 2.7% after data showed an experimental Wegovy pill showed a 16.6% weight-loss in a late-stage study, compared to previous trials of injectable versions of the drug.
(Reporting by Tristan Veyet in Gdansk, Johann M Cherian in Bengaluru, editing by Eileen Soreng)
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