Europe midday: Shares extend gains as US cuts rates, BoE holds

(Sharecast News) - European shares extended gains at midday on Thursday after a widely expected US rate cut, while the Bank of England held its benchmark steady and also slowed the pace of its bond selling programme. The pan-regional Stoxx 600 index was up 0.74% to 554.74 at 1206 BST. Germany's DAX gained 1.27%, Britain's FTSE 100 rose by 0.14% and France's CAC jumped 1.11%.

Traders were digesting the 25 basis point reduction on Wednesday after the central bank's 12 policy makers voted 11-to-1 in favour of the move. In London, the BoE kept its base rate at 4% amid persistent inflation of 3.8% - well above its 2% target.

The BoE's Monetary Policy Committee decided to cut back the pace of its quantitative tightening programme to £70bn over the next year, down from £100bn over the last 12 months on concerns sales were adding to bond market volatility and increasing borrowing costs.

In Washington, Federal Reserve chair Jerome Powell called the decision "risk management" as the world's largest economy grapples with a weakening jobs market and impact of President Donald Trump's global trade war. Expectations are for two more cuts this year but just one in 2026.

"The Fed governor's message could boil down to this: Yes inflation is above target, but the jobs market is clearly weakening, which is our number one concern. This is why it is beneficial to have a dual mandate, the BOE could justify a similar message by the data, however it has a sole mandate to achieve 2% inflation," said XTB research director Kathleen Brooks.

"It was always hard for this meeting to deliver a dovish surprise, which is why the market moves have been small so far. This meeting delivered exactly what the market expected: a succession of future rate cuts, most of them front-loaded for the rest of this year."

In equity news, Novo Nordisk shares were up as the Danish pharma giant said Wednesday that late-stage trial results for its once-daily obesity pill showed "significant" weight reduction and tolerability in line with its blockbuster Wegovy injection.

Puma shares slipped after a 17% surge in late Wednesday trade on a report that Authentic Brands CEO Jamie Salter and private equity firm CVC's German head Alex Dibelius both expressed interest in the 29% stake held by the Pinault family, paving the way for a potential bidding war.

Reporting by Frank Prenesti for Sharecast.com