Europe midday: Shares up as ECB cuts rates

(Sharecast News) - European shares were higher in afternoon trade as the European Central Bank cut interest rates by 25 basis points, in line with expectations. The pan-regional Stoxx 600 index was up 0.26% with most major bourses higher. Traders are expecting a 25-basis-point interest rate cut from the ECB at its policy meeting.

The ECB now expects headline inflation to average 2.0% in 2025, exactly on its own target, down from 2.3% forecast in March. It also cut its inflation forecast for 2026, to 1.6% from 1.9%.

"Hopes for easing grew after Eurozone inflation dipped to 1.9% in May, just below the ECB's target. More cuts are on the cards too, with interest rates expected to fall to 1.5% by the end of the year - low enough to start actively supporting the economy."

"Meanwhile, global markets are still cautious due to persistent trade tensions, with US President Trump casting doubt on progress with China. US futures are trading broadly flat this morning, with sentiment dented after the latest bout of economic data showed slowing growth in private sector jobs."

"Strong earnings and a resurgence in the tech trade have been enough to push US markets higher over the past month or so, but there's still a sense of caution in the air."

In equity news, shares in Wizz Air plunged 25% after the budget carrier's annual operating profit missed expectations.

Eutelsat fell sharply after South Korea's Hanwha Systems offered to sell its entire 5.4% stake in the firm for around €78m.

Reporting by Frank Prenesti for Sharecast.com