European stocks hit 6-week highs
Brussels
European stocks rose to a six-week high on Thursday, amid optimism about a possible EU-US trade agreement, while investors awaited the European Central Bank's rate decision later.
The pan-European STOXX 600 index rose 0.6 percent in morning trading, reaching its highest level since June 11. Germany's DAX index jumped 0.9 percent, while UK's FTSE 100 index rose 0.6 percent to reach an all-time high, extending its gains for the sixth consecutive session.
Bank stocks led the gains among European sectors, rising 2.3 percent, supported by gains at Deutsche Bank and BNP Paribas. German Deutsche Bank shares climbed 4.4 percent after reporting better-than-expected second-quarter profit. French bank BNP Paribas gained 1.9 percent after reporting a smaller-than-expected decline in second-quarter profit.
Shares of Swiss drugmaker Roche advanced 2 percent, giving the STOXX 600 a boost after the company reported better-than-expected first-half operating profit. Conversely, shares of Swiss consumer goods giant Nestlé fell 4.5 percent after it announced first-half results and a strategic review of its business.
Interest rate futures markets reflected this shift in sentiment, with traders scaling back bets on a September rate cut. The yield on the 2-year German bond also spiked, and weighed on equity markets.
At 2 percent, rates remain squarely to the middle of the ECB's 1.5 percent to 2.5 percent neutral range,' said Marchel Alexandrovich, an economist at Saltmarsh Economics.
The central bank's cautious stance comes as eurozone inflation has returned to the ECB's 2% target alongside signs of economic resilience.
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