Major European bourses traded lower on Thursday, with both the STOXX 50 and STOXX 600 down 0.4% as investors digested a fresh wave of corporate earnings, looked ahead to the European Central Bank’s upcoming policy decision, and continued to monitor developments in global trade tensions. Caution prevailed across sectors as mixed earnings reports and lingering uncertainties kept risk appetite in check.
European stocks lower, earnings and ECB in focus
Shares of Hermes dropped 3% after the French luxury brand reported a 7% year-on-year revenue increase in Q1, missing market expectations for a 7.6% rise. The softer-than-anticipated growth raised concerns about the resilience of high-end consumer demand, particularly in the key Chinese market. In contrast, Siemens Energy soared nearly 10%, leading the gainers, after the company raised its outlook for fiscal 2025. The upbeat forecast was underpinned by stronger-than-expected first-quarter revenue and profit, signaling robust demand across its energy infrastructure segments.
Meanwhile, investors kept a close eye on the ECB, which is widely anticipated to deliver a 25 basis point rate cut later today. Markets are eager for signals on the central bank’s future policy path amid signs of cooling inflation and sluggish growth across the Eurozone. Any hints from President Christine Lagarde regarding the timing of subsequent rate moves could heavily influence market sentiment in the coming sessions.
Trade optimism provided some support
On the global front, trade optimism provided some support to sentiment after US President Donald Trump claimed there had been “big progress” in negotiations with Japan, raising hopes of further breakthroughs with other major trading partners. However, the broader market mood remained cautious as investors weighed the possibility that prolonged trade disputes and tightening financial conditions could dampen global growth prospects.
Sector-wise, consumer goods and financials underperformed, while energy and utilities sectors showed relative resilience. Overall, trading volumes were muted as participants awaited key catalysts, particularly from central banks and global trade negotiations, before making bolder moves.
