European Stocks Surge as Fed's Rate Cut Sparks Optimism

European stocks jumped on Thursday following a 50-basis-point rate cut by the U.S. Federal Reserve. The STOXX 600 index rose 0.7%, hitting a two-week high, with miners leading the gains. Rate-sensitive sectors and select stocks like Next and Ocado also saw significant rises, while some faced declines.

European stocks experienced a significant rise on Thursday after the U.S. Federal Reserve enacted a 50-basis-point rate cut and indicated further measured easing. This has heightened expectations for a soft landing of the American economy.

The STOXX 600 index climbed 0.7% to 518.24 points, reaching its highest level in over two weeks. Miners led the sector gains with a 3% increase, their best performance this year, following the much-anticipated rate cut and betting on further stimulus from China, a major metals consumer.

Rate-sensitive real estate, technology firms, and banks saw gains between 0.5% and 1.3%, while telecom and utilities dipped 0.7% each. Fed Chair Jerome Powell reiterated the central bank's commitment to sustaining low unemployment as inflation cools. Investors are now eyeing the Bank of England's upcoming rate decision, with the FTSE 100 up 0.7%. Britain's Next and Ocado Group stocks climbed on optimistic forecasts, while Allegro and IG Group saw declines due to tempered earnings projections and dividend trading status.

(With inputs from agencies.)