FRANKFURT: European shares ended Thursday on a strong note in a chipmaker-driven rally, further powered by the resumption of the US Federal Reserve’s policy-easing cycle, while SIG slumped after a profit warning. The pan-European STOXX 600 ended 0.79 percent higher at 554.97 points, with the wider technology index leading gains by rising 4.1 percent - its biggest single-day advance since April 23. The sector was boosted by European semiconductor stocks, which soared in line with their Wall Street counterparts after chip bellwether Nvidia announced plans to invest USD5 billion in struggling peer Intel.
Europe’s BE Semiconductor surged 7.9 percent, while equipment manufacturers ASML and ASMI jumped 7.7 percent and 8.7 percent, respectively.
Gains were also backed by the Fed’s overnight decision to cut interest rates by an expected quarter of a percentage point, the US central bank’s first dovish policy move since December. The Fed projected further cuts at meetings in October and December, prioritising the need to stall further weakening in the labor market.
“The fact we’ve had a normal-sized reduction and guidance would suggest that it’s a slow and steady path for monetary easing. And investors clearly like that because it doesn’t imply that there’s major worries,” said Daniel Coatsworth, investment analyst at AJ Bell.
Elsewhere in Europe, the Bank of England kept its main interest rate on hold at 4 percent after last month’s quarter-percentage-point reduction. The UK’s benchmark FTSE 100 index was up 0.2 percent.
Norway’s central bank followed the Fed’s path to deliver a quarter point cut, projecting a slower easing pace going forward.
Also contributing to STOXX 600 moves was the broader luxury sector, up 1.8 percent, alongside an index of automakers , up 1.2 percent.
Novo Nordisk surged 6.2 percent as investors turned more positive about the Danish drugmaker’s prospects following a key diabetes conference held in Vienna this week.
However, SIG Group slid 24.3 percent after the Swiss packaging group issued a profit warning for 2025 and suspended its cash dividend.
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