European shares jump 1% after ECB rate decision; Novo Nordisk hits record high

(For a Reuters live blog on U.S., UK and European stock markets, click or type LIVE/ in a news window) * Experimental Novo obesity drug more effective than Wegovy * Virgin Money UK jumps on 2.9 bln pound buyout offer * Hugo Boss down after disappointing outlook * Teleperformance plunges on cautious FY24 outlook (Updated at 1338 GMT) By Shubham Batra and Ankika Biswas March 7 (Reuters) - European shares jumped on Thursday as the European Central Bank signalled cooling inflation and kept interest rates steady, while Novo Nordisk hit a record high following a strong experimental obesity drug update.

(For a Reuters live blog on U.S., UK and European stock markets, click or type LIVE/ in a news window) *

Experimental Novo obesity drug more effective than Wegovy *

Virgin Money UK jumps on 2.9 bln pound buyout offer *

Hugo Boss down after disappointing outlook *

Teleperformance plunges on cautious FY24 outlook (Updated at 1338 GMT)

By Shubham Batra and Ankika Biswas March 7 (Reuters) -

European shares jumped on Thursday as the European Central Bank signalled cooling inflation and kept interest rates steady, while Novo Nordisk hit a record high following a strong experimental obesity drug update. The pan-European STOXX 600 extended gains and hit a fresh record high, last up 1%, with rate-sensitive technology and real estate stocks climbing more than 1% each.

Euro area bond yields also fell, aiding equities, with markets pricing in more than 100 basis points of rate cuts in 2024 from 92 bps before the policy decision. The European Central Bank kept borrowing costs at record highs, but took a first, small step towards lowering them, saying inflation was easing faster than it anticipated only a few months ago.

"The markets have reacted quite quickly to the softer growth and inflation outlook which the latest ECB forecasts have delivered," said Stuart Cole, chief economist at Equiti Capital. "Even though these revisions were largely expected, they have still boosted expectations that the ECB is getting closer to finally deciding it can afford to cut rates."

Novo Nordisk jumped 7.1% after early trial data for its much-anticipated experimental obesity drug amycretin showed a higher weight loss compared with its popular Wegovy treatment. The broader healthcare sector led sectoral gains with a 2.2% rise to a near two-year high, with Denmark-based Zealand Pharma jumping 10.2% after BTIG initiated coverage with a "buy" rating.

Virgin Money UK jumped 36.1% as Britain's Nationwide Building Society was planning to buy the company in a potential 2.9 billion pound all-cash deal. HSBC Holdings lost 3.8% on trading ex-dividend. Further, global banking regulators proposed measures to crack down on "unacceptable" attempts by the biggest banks to game rules in a bid to avoid heavier capital requirements.

Teleperformance slumped 19.6% after the call-centre operator forecast limited 2024 growth after missing full-year revenue target. German fashion house Hugo Boss dropped 11.7% after warning of much slower sales growth this year and forecasting profit below estimates.