Record Highs and Rising Uncertainties: Europe’s Economic Pulse

Europe's stock markets hit record highs driven by real estate and technology sectors, as the ECB cut interest rates. STOXX 600 marked consecutive gains, while individual stocks showed mixed results amid economic uncertainties. ECB's policy contrasts with the Federal Reserve’s, reflecting distinct economic challenges and responses.

Europe's stock markets reached new record highs on Thursday, riding a wave led by real estate and technology stocks. The boost came after the European Central Bank cut interest rates by a quarter point, as anticipated by market analysts.

The pan-European STOXX 600 index gained 0.6% by 1335 GMT, marking its third successive session of record gains. With the European Central Bank's fifth rate cut since June reducing the deposit rate to 2.75%, experts like Michael Brown, a senior research strategist at Pepperstone, suggest that rates may drop further as the year unfolds due to growing risks of inflation undershooting and a subdued growth outlook.

In sharp contrast to the ECB's move, the Federal Reserve decided to keep rates unchanged on Wednesday. This policy divergence highlights the different challenges facing these economies. Additionally, the euro zone economy remained stagnant last quarter amid persistent consumer caution, adding fuel to fears about a delayed economic recovery.

(With inputs from agencies.)