European Stocks Rise as Fed Cuts Rates, but SIG Shares Slide on Profit Warning
European shares rose on Thursday, boosted by gains in technology stocks, after the US Federal Reserve cut interest rates for the first time since December. However, some companies, including SIG and Next, saw sharp declines after issuing downbeat outlooks.
The pan-European STOXX 600 index climbed 0.67% to 554.32 points by 0822 GMT, with gains spread broadly across sectors. Technology stocks led the advance, rising 2.1% as the sector rebounded from losses of about 7% over July and August. Tech-linked shares in Asia also gained following the Fed’s policy shift.
Fed Rate Cut Lifts Sentiment
Late on Wednesday, the Federal Reserve cut interest rates by a quarter of a percentage point. While the move was widely expected, it marked the first easing step in nine months. The Fed signalled a cautious approach to further cuts, dampening expectations of rapid monetary easing.
“Even though it wasn’t as dovish as expected, at the end of the day, more rate cuts are expected and that’s just going to be good for the general stock market,” said Daniela Hathorn, senior market analyst at Capital.com.
In Europe, Norway’s central bank followed with a 25-basis-point cut, while the Bank of England was expected to hold rates steady later in the day.
Company Losses Drag Market Segments
Not all stocks benefited from the upbeat sentiment. SIG Group tumbled 20% and was briefly halted from trading after the Swiss packaging firm issued a profit warning for 2025 and suspended its dividend payout.
British fashion retailer Next fell 5.4% after forecasting slower UK sales growth in the second half of the year. German tyre maker Continental also dropped 20% after spinning off its auto supplier unit Aumovio, which debuted on the Frankfurt Stock Exchange at €35 per share.
Investors Eye Fiscal Policy and Growth Risks
Analysts say investors are watching closely for signs of fiscal intervention in major European economies, particularly Germany and France, as governments face pressure to boost growth despite rising debt levels.
Meanwhile, Denmark’s Novo Nordisk rose 2.7% after reporting that its experimental Wegovy pill achieved a 16.6% weight loss in a late-stage trial, outperforming earlier results from injectable versions of the treatment.
with inputs from Reuters
