LONDON – European stocks were mixed on Thursday, with caution returning after gains made in the previous session.
The pan-European Stoxx 600 was marginally higher in early trade. Retail stocks were the standout performers, gaining 1.8% while materials fell 0.7%.
The muted open for European equities came after gains on Wednesday on strong US economic data that blunted investor fears of a looming recession. The ISM Non-Manufacturing Purchasing Managers’ Index showed a surprise rebound in July, which also pushed US stocks higher.
Britain’s FTSE started flat on Thursday as the market grew nervous ahead of the Bank of England’s next monetary policy decision. The central bank is widely expected to hike interest rates by 50 basis points, the largest single hike since 1995.
Such a move would bring borrowing costs down to 1.75% as the central bank battles rising inflation, and would be the first half-point hike since it was made independent by the UK government in 1997. The expected increase comes as UK inflation hit a new 40-year high of 9.4% in June.
Elsewhere, Asia-Pacific stocks traded higher on Thursday after Wall Street’s rally as investors shelved tensions over US House Speaker Nancy Pelosi’s controversial visit to Taiwan.
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Meanwhile, US stock futures were lower on Thursday morning, even as major moving averages suffered a two-day slide in the previous regular trading session.
Pre-bell gains on Thursday came from Credit Agricole, Adidas, Bayer, Lufthansa, Merck, Zalando, Rolls-Royce, Next, Glencore and Adecco Group.
Lufthansa shares rose 6% to lead the Stoxx 600 after the German posted a smaller-than-expected quarterly loss.
At the bottom of Europe’s blue-chip index, Danish medical device company Ambu plunged 14% after it cut its margin forecast and announced it would lay off around 200 employees.