European Shares Steady as ECB Delivers Expected Rate Reduction

(Bloomberg) — European equities were steady as the European Central Bank delivered the expected quarter-point interest rate cut at its last meeting of the year.

The Stoxx Europe 600 Index was little changed at the close in London. The miners and retailers fell the most, with the latter dragged down by Inditex SA, which extended losses after a downgrade. The autos sector posted the biggest gains. The Swiss Market Index climbed 0.3% after the Swiss National Bank lowered rates by a half point to stem gains in the franc. 

The ECB reduced the deposit rate by a quarter point to 3%, signaling more cuts next year as inflation nears 2% and the economy struggles. President Christine Lagarde said the latest data suggest slowing momentum and the ECB sees risks to growth lilted to downside.

“It’s really as expected, we’re still in the same scenario of gradual cuts decided meeting after meeting,” said Kevin Thozet, a member of the investment committee at Carmignac in Paris. “They’re keeping some room for maneuver to cut further should growth fall.” 

Meanwhile, initial jobless claims in the US rose to 242,000 for the week ended Dec. 7, ahead of economists’ estimates for 220,000, data showed on Thursday.

European stocks have rebounded in December on optimism over Chinese stimulus measures. So far this year, the Stoxx 600 is up 8.4%, with German shares among the best performers. Positive sentiment has also received a boost after data Wednesday showed US inflation matched expectations, bolstering wagers on a Federal Reserve rate cut next week. 

Elsewhere, China’s top officials signaled more public borrowing and spending in 2025 following a two-day huddle of the Central Economic Work Conference in Beijing, according to China Central Television.

In individual stock moves Thursday, Brunello Cucinelli SpA rallied as much as 8.5% to a nine-month high after the luxury goods maker increased its revenue growth forecast.

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–With assistance from Michael Msika and Allegra Catelli.

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