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European Equity Benchmarks Close Mixed; Bank of England Raises Rates for First Time in 10 Years

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The broad-based major European indices closed mixed in Thursday's trading session, as investors bought mining stocks and sold tech equities.

In economic news, the Bank of England's Monetary Policy Committee ( MPC ) voted by a majority of 7-2 to increase interest rates by 0.25 percentage points to 0.5%. It is the first rate increase since July 2007. The committee voted unanimously to maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at GBP10 billion ($13.05 billion). It also voted unanimously to maintain the stock of UK government bond purchases, financed by the issuance of central bank reserves, at GBP435 billion.

The MPC said it still expects inflation to peak above 3.0% in October, "as the past depreciation of sterling and recent increases in energy prices continue to pass through to consumer prices."

Meanwhile, the final IHS Markit Eurozone Manufacturing PMI rose to an 80-month high of 58.5 in October, up from 58.1 in September. The PMI has signaled expansion in each month since July 2013. The upturn was again led by a strong-performing core of Germany, the Netherlands and Austria.

Growth was also reported in Ireland and Greece, and all of the countries covered registered expansions for the fifth straight month. However, Ireland and Greece both saw their respective rates of increase slow since the prior survey month.

"It's especially encouraging to see employment growing at a survey-record pace as firms seek to boost capacity in response to fuller order books," said Chris Williamson, chief business economist at IHS Markit. "Export order growth remains encouragingly solid, suggesting little impact from the strengthening of the euro this year, and domestic demand continues to improve across the region."

In equities, mining stocks helped lift the FTSE in London as BHP Billiton rose 2.8%, while Antofagasta, and Rio Tinto each closed 2.4% higher, and Anglo American and Glencore gained 2% and 1.6% respectively. Private hospital group Mediclinic International led all gainers, climbing 4%, followed by packaging company Smurfit Kappa Group, and oil and gas company Royal Dutch Shell.

In Frankfurt, semiconductor company Infineon Technologies and health care company Fresenius SE led the DAX lower, falling 2.1% and 1.9% respectively. Prosiebensat 1 Media and software company SAP were off 1.8% and 1.6%, while industrial gasses company Linde and consumer goods company Beiersdorf dropped 1.5% and 1.1%.

And in Paris, IT company Atos helped the CAC edge into negative territory, falling 2%, followed by electricity utility company Schneider Electric, and pharmaceutical firm Sanofi, each of which closed 1.2% lower. Airplane manufacturer Airbus lost 1.1%, while IT and staffing firm Cap Gemini, and semiconductor company STMicroelectronics NV each dropped 0.9%.

The FTSE rose 0.90%, the DAX declined 0.18%, and the CAC-40 edged 0.07% lower.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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