Europe open: Shares make strong start ahead of ECB rate call

3rd Jun 2024 07:53

(Sharecast News) - European markets made a strong start to the week as investors look ahead to a European Central Bank interest rate decision on Thursday, widely expected to be a 25 basis point cut.

The pan-regional Stoxx 600 index was up 0.83% at the open to 522.42 with all major markets higher. Germany's DAX was up 1.02% to 18,672, while France's CAC 40 was up 0.96% to 8,064.

Economists and traders widely expect a 25 basis point rate cut - the ECB's first since 2019.

It would also mark the first time the ECB has cut rates ahead of the US Federal Reserve although optimism around successive rate cuts has waned in recent weeks as persistent 'sticky' inflation in the eurozone has led to policymakers to make more hawkish comments on the future path of monetary easing.

In economic news, activity in China's manufacturing sector grew in May at the fastest rate in two years, according to data released on Monday.

The Caixin/S&P Global manufacturing purchasing managers' index rose to 51.7 from 51.4 in April, hitting its highest level since June 2022 and coming in ahead of consensus expectations of 51.5.

A reading above 50.0 signals expansion while a reading below indicates contraction.

On the equities front, Thule Group and St James's Place both led the risers with gains of more than 5%.

Reporting by Frank Prenesti for Sharecast.com