Healthcare, retail stocks lead Europe's STOXX 600 higher
written by Bella Palmer
The pan-European STOXX 600 index ended 0.4% higher, rising for the second day and ending at its highest level in this month
Europe's main stock index climbed on Thursday, with healthcare and retail stocks leading the charge, while investors cheered growing prospects of interest rate cuts by some central banks and sifted through economic data.
The pan-European STOXX 600 index ended 0.4% higher, rising for the second day and ending at its highest level in this month.
The retail sector rose to the top, boosted by an 11% climb in JD Sports after the British sportswear retailer reported an improvement in second-quarter underlying sales growth.
Swiss pharmaceutical firm Siegfried Holding gained 7% after better-than-expected first-half results, while Biomerieux added around 6% after UBS initiated coverage of the French biotechnology stock with a "buy".
The healthcare sector reached a record high, also thanks to a 2.4% rise in Europe's most valuable company by market value, Novo Nordisk.
With market participants broadly pricing in a 25 bp rate cut by both the U.S. Federal Reserve and the European Central Bank in September, the occurrence of these could provide a fresh boost to risk assets.
The ECB's July meeting minutes showed policymakers saw no urgency in reducing rates but hinted at a fresh discussion in September due to growth concerns.
Different data sets showed euro zone business activity had surprising strength in August, potentially weakening expectations for two more rate cuts from the European Central Bank, while last quarter's slowing negotiated wage growth bolstered the case for a September rate cut.
While further ECB cuts are on the way - we see cuts in September and December this year - the wider path is likely to be gradual and subject to considerable uncertainty, according to Chris Hare, senior economist at HSBC.
Investors also awaited policymakers' commentary at Jackson Hole this week, hoping that the U.S. Federal Reserve will kick off its rate-cutting cycle next month.
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