Jamie Spencer
European markets closed slightly lower on Thursday, reflecting a mixed reaction to the European Central Bank’s (ECB) decision to cut interest rates by 25 basis points. The pan-European Stoxx 600 index fell 0.14%, with sectors showing divergent performance. Mining stocks declined by 1.7%, dragging down the index, while the automotive sector posted gains of 0.87%, providing some support.
ECB Cuts Rates for the Fourth Time in 2024
The ECB announced its fourth rate cut of the year, reducing its key interest rate by 25 basis points to 3%. This latest adjustment marks a cumulative 1-percentage-point reduction since the easing cycle began in June 2024. The move was widely anticipated as the central bank seeks to navigate slowing inflation and economic uncertainty across the eurozone.
Mixed Market Reaction
The euro initially weakened against the dollar following the rate cut announcement. However, it recovered later in the session, climbing 0.18% to $1.051. European equities reflected a cautious tone as investors weighed the implications of the ECB’s decision for growth and inflation in the region.
The ECB’s decision to continue its easing path highlights its commitment to providing monetary support amidst global economic headwinds and persistent inflationary pressures.
Sectoral Performance
The market reaction was uneven, with significant losses in mining stocks overshadowing gains in the automotive sector. Investors are closely monitoring sector-specific dynamics and broader economic indicators as the year-end approaches.
