European Technology Stocks Propel 1% Climb Amid ECB Rate Decision Anticipation

European shares surged 1% on Thursday, driven by robust performances in technology stocks while investors awaited a policy decision from the European Central Bank (ECB). This rally, led by a 2.5% jump in tech stocks, saw the pan-European STOXX 600 index poised for its best day in over a month.

European shares surged by 1% on Thursday, buoyed by strong performances in technology stocks, as investors anticipated a European Central Bank policy decision later in the day, with a rate cut almost certain.

The pan-European STOXX 600 index rose by 1% to 513.1 points, marking the best day in more than a month if gains hold. All regional bourses traded over 1% higher.

Technology stocks surged by 2.5%, leading the European benchmark index, inspired by a rally in their Asian counterparts. A report from Semafor suggested the U.S. government might allow Nvidia to export advanced chips to Saudi Arabia, propelling Nvidia's stock up by 8%.

Basic resources gained 2.3% following a rise in base metal prices, buoyed by hopes of an interest rate cut in the U.S. next week. All sub-sectors but one traded in positive territory.

The European Central Bank is set to meet at 1215 GMT. Widespread expectations predict a 25-basis-point rate cut. Markets will closely watch ECB President Christine Lagarde's remarks at 1245 GMT, seeking clues on potential future cuts in October and December.

"A rate cut today is fully anticipated. The market's focus will shift to when the next ECB rate cut will occur? We likely won't receive much guidance on that today," stated Ben Laidler, head of equity strategy at Bradesco BBI. "The ECB may not need to take more aggressive actions, but they could if the data warrants it. The ECB will likely proceed cautiously."

Meanwhile, Spain's consumer price figures showed EU-harmonised inflation eased to 2.4% in August, pushing the IBEX 35 index up over 1%. Swedish inflation dropped by 0.5% in August, slightly below forecasts.

Roche shares fell by 4% after the Swiss drugmaker reported that promising early-stage trial results of its experimental weight-loss pill were based on just six patients. An overnight reading of U.S. core CPI revealed a 0.28% rise in August, slightly above the forecast of 0.2%, leading markets to conclude that the Federal Reserve would implement a 25 basis points rate cut next week.

(With inputs from agencies.)