Stock prices, inflation data and ECB decisions

European markets ended Thursday down a preliminary 0.4%, with most sectors and major exchanges in negative territory.

Banking stocks and telecommunications stocks led the decline, falling 2.4% and 2.1%, respectively.

— Sam Meredith

Shares in British insurer Aviva fell 6% after it announced new plans to “restructure and rebrand” its financial business.

Meanwhile, AstraZeneca Plc rose 3% after pledging to increase its dividend this year ahead of a key vote on its CEO’s pay.

— Karen Gilchrist

The European Central Bank kept interest rates unchanged for the fifth consecutive time at Thursday’s meeting, but tightened its language on the possibility of future rate cuts.

“If the Board’s latest assessment of the inflation outlook, underlying inflation dynamics, and monetary policy spillovers provides further confidence that inflation is sustainably converging on target, we will reduce current levels.” “A level of monetary policy restrictions would be appropriate.”

Market prices currently suggest a 25 basis point rate cut in June, according to LSEG data.

— Karen Gilchrist

The European Central Bank is widely expected to announce a hold on interest rates on Thursday afternoon, paving the way for a possible rate cut in June.

ECB President Christine Lagarde suggested at the March Governing Council meeting that there was a good chance the bank would cut interest rates in June. Since then, inflation in the euro zone has fallen more than expected, reaching 2.4% in March.

”Policymakers will continue to be very sensitive to incoming data, but our view is that the rate cutting cycle will begin in June. Henk Potts, market strategist at Barclays Private Bank, said in a note: “As the year progresses, we expect quarter-point cuts in the remaining sessions, which should result in deposit rates of 2.75% at the end of the year.” Stated.

The decision will be announced at 2:15 p.m. Frankfurt time, before Lagarde’s press conference.

— Jenny Reid

UBS shares fell 1.2% on Thursday morning after the Swiss government proposed 22 measures aimed at tightening controls on banks that are “too big to fail.”

This comes a year after authorities brokered an emergency rescue of battered rival Credit Suisse by UBS, creating the largest merger of two systemically important banks since the global financial crisis. I was disappointed.

Beat Wittman, a partner at Zurich-based Porta Advisors, told CNBC’s “Squawk Box Europe” that regulations could limit UBS’s ability to challenge Wall Street giants. Ta.

Wittmann said this “creates a losing situation for Switzerland as a financial center and for UBS to be unable to develop its potential.”

“It comes down to the competitive conditions at the regulatory level. It’s of course a competency issue, and then it’s about incentives and the regulatory framework, and the regulatory framework, such as capital requirements, is a global challenge,” he added. Ta.

read more here.

— Elliott Smith, Jenny Reid

Shares in British cybersecurity firm Darktrace rose as of 9:45 a.m. in London after its third-quarter trading update showed revenue of $176.1 million, up 26.5% year-on-year. It rose 7%.

The London Stock Exchange-rated tech company also said it expected adjusted profit margins to beat previous expectations of 21% and raised its full-year sales growth forecast by 0.5 percentage points.

Quilter Cheviot technology analyst Ben Ballinger said the results showed “consistent strong growth and further gains and gains” and that Darktrace “remains undervalued relative to its U.S. peers.” ” he said.

He added that the improvement in net annualized recurring revenue was a highlight.

— Jenny Reid

Société Générale outperformed the Stoxx 600 in morning trading, rising 4% to its highest since September 2023.

The French bank said on Thursday it had agreed to sell its equipment financing business to BPCE Group for 1.1 billion euros ($1.182 billion), boosting its CET1 ratio, a measure of capital to assets, by 25 basis points. It is expected that this will improve.

The deal is expected to close in the first quarter of 2025.

The outstanding loans of both companies were approximately 15 billion euros at the end of December 2023.

Société Générale said the acquisition was a step forward towards its goal of building a “more streamlined, more synergistic and efficient business model” while strengthening its capital base.

— Jenny Reid

European markets were mixed early Thursday, with France’s CAC40 index and Britain’s FTSE 100 index both up about 0.1%, and Germany’s DAX index flat.

The Stoxx600 index was also almost flat.

A former member of the Bank of England said the US Federal Reserve is likely to cut interest rates before the European Central Bank, contrary to current market expectations.

“I think the Fed will be the first to really cut rates,” Deanne Julius, a founding member of the Bank of England’s Monetary Policy Committee, told CNBC on Tuesday.

Julius explained that his forecast is based on the Fed’s dual mandate of looking at both inflation and employment in the U.S. economy. The latest employment data shows a booming U.S. labor market, and inflation is falling, although it remains above the Fed’s 2% target.

Read the full story here.

— Sylvia Amaro

Citi has identified digital advertising and marketing services companies as high-risk but potentially attractive investment opportunities.

Analysts at the investment bank said that while the short-term outlook remains uncertain, “there may still be much to look forward to in the medium term.”

Wall Street banks predict the “attractive” but “high-risk” stock could rise 280% over the next 12 months.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Attractive returns and breadth of opportunity are among the many reasons why the United States has historically held the top spot among investors.

While the global superpower still has “some areas that look good” in terms of value, Stephen Glass, investment analyst at Pella Funds Management, is looking at opportunities elsewhere. There is.

“There are still areas where it could be valuable, but generally outside the U.S.,” said Glass, a managing director at an investment firm, naming the markets and stocks he is currently betting on.

CNBC Pro subscribers can read more here.

— Amara Balakrishna

European markets are set to open in mixed territory on Thursday.

According to IG data, the UK’s FTSE 100 index is expected to open 10 points higher at 7,957, Germany’s DAX falls three points to 18,090, France’s CAC rises one point to 8,043 and Italy’s FTSE MIB. is expected to fall 27 points to 33,355.

Investors are keeping an eye on the latest monetary policy decisions from the European Central Bank on Thursday, with earnings expected from Givaudan.

— Holly Ellyatt