European stock markets rise as ECB leaves interest rates unchanged

People walk next to the Thames with London's financial district in the background
People walk next to the Thames with London's financial district in the background. Photo: Thomas Krych/SOPA Images/LightRocket via Getty Images

European stock markets pushed higher on Thursday as the European Central Bank’s (ECB) held interest rates unchanged, and kept other monetary policy tools on hold.

In London, the FTSE 100 (^FTSE) was almost 0.1% up, crawling above the 7,000 points mark, while the French CAC (^FCHI) rose 0.8% and the DAX (^GDAXI) gained 0.9% in Germany.

It came as the ECB also pledged to keep rates low "until inflation hits new 2% target". Net purchases under the banks asset purchase programme will also continue at a monthly pace of €20bn.

The Pandemic Emergency Purchase Programme (PEPP) was maintained at €1.85tn (£1.6tn, $2.2tn) and asset purchase programme was kept at €20bn per month.

Investors will now have eyes on ECB president Christine Lagarde's 1.30pm news conference UK time. She is expected to answer questions about the central bank's new inflation targeting policy.

Watch: What is inflation and why is it important?

A string of corporate news was also moving individual stocks on Thursday, with Go Ahead Group (GOG.L) up 2.5% on the back of an announcement appointing a new chief executive officer.

Meanwhile, Unilever (ULVR.L) slumped 4%, the biggest loser on the index in morning trading, after warning rising commodity costs would squeeze its full-year operating margin. However, it beat expectations with second-quarter sales growth, helped by higher prices and strong sales of ice-cream and teas.

Read more: Unilever reveals profit margin hit amid rising commodity prices

Elsewhere, British factories recorded their strongest growth in new orders since the 1970s, with domestic orders growing at the fastest pace ever, according to the latest data from the CBI.

Manufacturing output volumes continued to grow at the quickest pace on record in the three months to July, matching June’s growth. However, firms continue to face significant cost pressures, due to ongoing global supply disruption.

"Manufacturers reporting a surge in 16 out of 17 sub-sectors favourably supports the economic recovery. The manufacturing output is expected to grow at an even faster rate in the next three months as a large section of enterprises will seek to revamp their pre-pandemic level commercial operations subsequent to the withdrawal of lockdown restrictions," Kunal Sawhney, CEO of Kalkine group, said.

"On the contrary, the invariable concerns surrounding the availability of skilled labour, raw materials and components can weigh on the volume as the sector struggles with acute cost pressures with the rising inflation in the country, as well as across the major economies of the world."

Watch: UK factories suffer worst quarter on record - CBI in June

Across the pond, S&P 500 futures (ES=F) were up 0.1%, Dow futures (YM=F) climbed almost 0.2%, and Nasdaq futures (NQ=F) were 0.2% higher a few hours before the bell in New York.

Later on Thursday, the latest US unemployment data is expected. US weekly jobless claims are forecast to fall modestly to 350,000 from 360,000.

Asian stocks rallied overnight despite outbreaks in unvaccinated populations and jitters around China's regulatory crackdown on technology firms. Bonds nursed losses and oil held on to gains on Thursday as investors seemed to set aside coronavirus concerns.

MSCI's broadest index of Asia-Pacific shares outside Japan took their lead from Wall Street, rising 1%, with broad gains from Sydney, Seoul and Hong Kong.

The Hang Seng (^HSI) rose 1.6% while the Shanghai Composite (000001.SS) was 0.3% higher and the Nikkei (^N225) climbed 0.6% in Japan.

Watch: What are SPACs?