(Reuters) – European stocks ended lower on Thursday as the European Central Bank slowed the pace of its interest rate hikes, while hinting that tightening may continue to tame inflation.

In Paris, the CAC 40 ended down 0.85% at 7,340.77 points. The British Footsie gained 1.1% and the German Dax 0.51%.

The EuroStoxx 50 index for its part lost 0.45%, the FTSEurofirst 300 0.5% and the Stoxx 600 0.47%.

Main point of the day’s program, the European Central Bank raised interest rates by 25 basis points on Thursday, and although it was the smallest increase since Frankfurt began its tightening cycle in the summer last to counter inflation, the door seems open to further hikes.

“We are not taking a break, it is very clear,” said the president of the institution, Christine Lagarde, citing significant risks on inflation.

“Such a move was widely expected. However, we expect another 25 basis point hike in June. Then, unless May inflation data is stronger than expected, the ECB could send a message like the Fed did yesterday,” said Massimiliano Maxia, senior fixed income strategist at Allianz Global Investors.

The US Federal Reserve (Fed) raised its benchmark benchmark rate by 25 basis points on Wednesday, opening the door to a possible pause, although its chairman Jerome Powell later warned that it was too early to say that the rate hike cycle was over.

Outside the euro zone, Norway’s central bank raised its key rate by 25 basis points on Thursday, as expected, adding that it would probably raise it again in June if the national currency remains weak.

VALUES

In values, the Casino distributor, penalized by a still difficult situation in its supermarkets and hypermarkets in France, fell 5.7% after reporting a slowdown in the growth of its turnover in the first quarter.

Technip Energies and Capgemini also ended down after their quarterly results.

On the winners side, the satellite operator SES granted itself 4.3% as it discusses a merger project with its American competitor Intelsat, and the car manufacturer Ferrari took 4.7% thanks to a better than expected profit in the first quarter.

AT WALL STREET

At the time of closing in Europe, the Dow Jones fell by 1.09%, the Standard & Poor’s 500 by 0.69% and the Nasdaq Composite by 0.32%.

The US banking sector continues to worry, with Los Angeles bank PacWest Bancorp down 47% at 1542 GMT.

THE INDICATORS OF THE DAY

The US Labor Department on Thursday reported a bigger-than-expected rise in jobless claims in the week to April 29, to 242,000 from 229,000 (revised) the previous week, a sign that the labor market is gradually easing. .

Other US jobs data also released on Thursday, however, showed a surprise rise in labor costs in the first quarter, which could make the Fed’s pause on rates less likely.

Earlier today, the S&P Global survey showed activity in the French services sector grew in April but not as quickly as initially estimated, with business confidence in the sector deteriorating slightly over the month. of April.

CHANGES

On the foreign exchange market, the dollar index, which measures the evolution of the greenback against a basket of reference currencies, rose by 0.09% after the ECB’s announcements and the publication on Thursday of data on the unit costs of workforce in the United States in the first quarter.

The euro for its part fell 0.47% to 1.1007 dollars.

RATE

In the bond market, the ten-year German Bund yield ended down more than 5 basis points at 2.1%, while its more interest-rate-sensitive two-year equivalent fell 13 basis points. at 2.5% after the announcements of the ECB.

The yield on ten-year Treasuries fell by around 8 basis points to 3.3%.

OIL

Oil prices continued to rise on Thursday, but not enough to make up for the drop of more than 9% recorded this week linked to concerns about demand in the main consumer countries.

A barrel of Brent rose 0.41% to 72.63 dollars and a barrel of American light crude rose 0.13% to 68.72 dollars.

(Written by Diana Mandia)

Copyright © 2023 Thomson Reuters