European Shares Dip as ECB Cuts Rates, No Future Guidance Given

European shares saw gains cut after the ECB lowered interest rates by 25 basis points without offering future guidance. The STOXX 600 index rose 0.5%, influenced by financial and healthcare stocks, but utility stocks dropped by 1%. ECB President Lagarde's comments were scrutinized for clues on future monetary policy.

European shares pared gains on Thursday after the European Central Bank (ECB) delivered a widely expected interest rate cut but provided no outlook for future moves.

The pan-European STOXX 600 was up 0.5% as of 1300 GMT, off its three-week high hit earlier in the session, supported by financial and healthcare stocks. The ECB cut borrowing costs by 25 basis points to 3.75% from its record-high 4%, acknowledging progress in its battle against high inflation but also signalling that the fight was still on.

"The detail that's already been communicated is the ECB is not pre-committing itself to any particular rate path, so that seems to be one of the things that is offsetting the market a little bit," said Peter Garnry, head of Saxo Strats at Saxo Bank. Bond yields across the board rose after the decision, while money markets are now pricing in 35 bps of cuts by the ECB this year, on top of today's move, as per LSEG data.

Markets also digested remarks from ECB President Christine Lagarde to ascertain the monetary policy trajectory, given the recent uptick in inflation. Utility stocks were the biggest drag, down 1%, while real estate turned negative after the decision, falling 0.6%.

European lenders led sectoral gains, rising 1.3%, while healthcare was another boost, advancing 1.2% as Novo Nordisk rose 3.3% to hit a record high. Technology stocks trimmed some gains and were last up 1.2%, holding near its highest since December 2000.

German enterprise software giant SAP rose 4%, lifting the sector, after CEO Christian Klein gave encouraging guidance for 2026 and 2027. The stock topped Germany's DAX 40 , which was up 0.5%. Dutch semiconductor firm ASML also extended its gains from Wednesday, rising 1.3%.

Remy Cointreau edged up 1% after the French cognac maker reported a smaller-than-expected drop in its annual profit and predicted a recovery over the coming year. Nemetschek advanced 5.2% as the German software developer agreed to buy U.S. software provider GoCanvas.

On the data front, euro zone retail sales fell more than anticipated in April, declining 0.5% against expectations of a 0.3% decline.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)