European shares snap four-day losing streak as investors weigh ECB rate hike

[BENGALURU] European shares closed higher on Thursday (Jun 11), snapping a four-day losing streak, as investors looked past escalating rhetoric from US President Donald Trump and weighed the European Central Bank’s (ECB) decision to raise interest rates.

The ECB raised borrowing costs by an expected 25 basis points, its first hike in nearly three years, while lifting inflation forecasts and cutting its growth outlook amid the price pressures stemming from the ongoing Middle East conflict.

“It’s not a rate hike that will derail the eurozone economy,” said Carsten Brzeski, global head of macro at ING. “The risk of doing nothing and potentially falling behind the curve is larger than the risk of any adverse effects on growth from higher interest rates.”

Traders still expect borrowing costs to rise another 25 basis points before the end of the year, according to LSEG-compiled data.

Rate-sensitive sectors lagged. Financial services slipped 0.7 per cent, with asset managers ICG and Partners Group down 4.7 per cent and 3 per cent, respectively. Real estate stocks also fell 0.8 per cent.

The broader pan-European Stoxx 600 closed up 0.7 per cent at 622.46 points, while major regional bourses also advanced.

The Stoxx 600 briefly pared gains after Trump said that the US would hit Iran “very hard tonight” and would soon take control of the country’s oil and gas infrastructure and markets.

Crude prices see-sawed throughout the day. They were last up 0.5 per cent at US$93.58 a barrel.

Technology stocks were mixed. Semiconductor shares led the gains on the benchmark index, with BE Semiconductor and ASM International rising 6.6 per cent and 7.3 per cent, respectively, on expectations they will benefit from the artificial intelligence boom.

SEE ALSO

European shares edge higher ahead of ECB rate verdict; Middle East tensions eyed 

Software stocks, however, slipped after Oracle fell sharply following a forecast for higher-than-expected capital spending, pressuring the broader enterprise software sector.

SAP dropped 6.6 per cent, Capgemini fell 4.2 per cent and Dassault Systemes declined 5.8 per cent. UBS also downgraded European IT stocks to “neutral” from “attractive”, citing elevated valuations and renewed focus on AI.

The broader tech index gained 1 per cent. It has seen some volatility since late last week as AI stocks globally have paused from a strong rally over the past two months, before bouncing back on Thursday.

Among other movers, Halma tumbled nearly 15.4 per cent after the British health and safety device maker forecast slower organic constant-currency revenue growth for fiscal 2027 than in the previous year.

Hugo Boss rose 9.1 per cent after Britain’s Frasers Group launched a US$2.3 billion takeover offer for the German fashion brand, while Wizz Air jumped 6 per cent after annual profit beat estimates. The airline, however, withheld guidance for fiscal 2027, citing an uncertain outlook. REUTERS