By Johann M Cherian and Tristan Veyet (Reuters) - European shares rose on Thursday, led by technology stocks after the U.S. Federal Reserve lowered borrowing costs for the first time since December,
Chipmakers Propel Europe's STOXX 600 Upward Following Fed Rate Cut
Market Reactions to Fed Rate Cut
By Johann M Cherian and Tristan Veyet
Impact on Technology and Semiconductor Stocks
(Reuters) - European shares ended Thursday on a strong note in a chipmaker-driven rally, further powered by the resumption of the U.S. Federal Reserve's policy‑easing cycle, while SIG slumped after a profit warning.
Responses from Central Banks
The pan-European STOXX 600 ended 0.79% higher at 554.97 points, with the wider technology index leading gains by rising 4.1% - its biggest single-day advance since April 23.
Sector Performances and Notable Stocks
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 $5 billion in struggling peer Intel.
Europe's BE Semiconductor surged 7.9%, while equipment manufacturers ASML and ASMI jumped 7.7% and 8.7%, respectively.
Gains were also backed by the Fed's overnight decision to cut interest rates by an expected quarter of a percentage point, the U.S. 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% after last month's quarter-percentage-point reduction. The UK's benchmark FTSE 100 index was up 0.2%.
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%, alongside an index of automakers, up 1.2%.
Novo Nordisk surged 6.2% 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% after the Swiss packaging group issued a profit warning for 2025 and suspended its cash dividend.
Continental plunged 21.9% as the tire maker spun off Aumovio, which made its debut on the Frankfurt Stock Exchange with a total market value of about 3.5 billion euros ($4.14 billion).
Aena fell 4.7% after the Spanish airport operator announced plans to invest 12.88 billion euros ($15.24 billion) to upgrade its terminals from 2027 to 2031.
Political jitters in France also persisted after the country was rattled by anti-austerity protests on Thursday, with protestors urging President Emmanuel Macron and his new Prime Minister Sebastien Lecornu to scrap proposed budget cuts.
(Reporting by Tristan Veyet in Gdansk, Johann M Cherian in Bengaluru; Editing by Eileen Soreng and Richard Chang)
