On October 15, 2024, European shares reached a two-week high as investors closely monitored the ongoing corporate earnings season and awaited the European Central Bank's interest rate decision expected later this week. The pan-European STOXX 600 index rose by 0.2%, supported by gains in telecom and travel stocks.
The European Central Bank is anticipated to announce a further 25 basis point cut in rates, following recent data indicating a deteriorating economic outlook for the euro zone since the last meeting in September. Ericsson reported third-quarter earnings that exceeded expectations, driven by a resurgence in demand for 5G equipment in North America, leading to an 8% rise in its stock price.
Conversely, energy stocks fell by 2.5% as oil prices dropped. Reports indicated that Israel would refrain from attacking Iranian oil facilities, alleviating concerns over potential supply disruptions. TotalEnergies' shares decreased by 3.7% after the company projected a significant decline in downstream results due to lower refining margins.
In the UK, the benchmark FTSE 100 index opened lower, down 0.1% at 8,283.31 points, primarily due to losses in oil and industrial metal sectors. Oil stocks saw a 2.7% decline amid a weaker demand outlook. The latest labor report revealed a drop in the unemployment rate to 4%, while wage growth slowed to its lowest level in over two years, indicating a cooling labor market.
Market analysts suggest that the Bank of England may consider cutting interest rates in its upcoming November meeting, with an 83% chance of a rate cut already priced in. Among individual stocks, Bellway rose by 6.9% after announcing plans to increase home construction in the 2025 financial year.