European stocks gained on Friday as investors weighed the impact of the European Central Bank’s (ECB) recent interest rate cut. The Stoxx 600 index rose 0.51% by mid-morning, with most sectors in positive territory. Automakers led the gains, up 1.23%, while retail stocks also saw a boost of 1.13%. Travel and leisure stocks dipped slightly, down 0.17%.
The ECB reduced its key interest rate by 25 basis points on Thursday, marking the second cut this year, bringing the rate to 3.5%. ECB President Christine Lagarde offered little guidance on future monetary policy, stating the bank was not committing to any specific rate path.
This decision comes just before the U.S. Federal Reserve’s meeting on September 17-18, where the Fed is expected to begin its own rate-cutting cycle.
Elsewhere, French inflation fell to 1.8% in August, signaling a potential easing of price pressures across Europe. Meanwhile, Asia-Pacific markets were mixed, with Chinese stocks rebounding and Australian markets nearing record highs.