European Shares Climb Post Fed Rate Cut Amid Tech Concerns

European shares rose following a U.S. Federal Reserve rate cut despite concerns over tech valuations. STOXX 600 closed 0.5% higher, driven by optimism from major markets like France and the UK. The banking sector gained, while concerns about banking regulations emerged. Key movers included Unicredit, ING, and Schneider Electric.

European stocks experienced a surge on Thursday, closing on a positive note after a Federal Reserve rate cut. This came after several lukewarm sessions as investors assessed both U.S. policy shifts and Swiss monetary strategies.

The pan-European STOXX 600 index increased by 0.5%, bringing optimism to major markets such as France's CAC 40 and London's FTSE 100. Despite initial concerns over tech valuations following Oracle's substantial AI investment, the markets responded positively to the Fed's 25 basis point rate cut, though caution remains as further rate reductions appear unlikely in the short term.

In the banking sector, strong performances were seen, with Exane BNP Paribas supporting lenders like Unicredit and ING, forecasting a robust return on equity by 2027. Meanwhile, Schneider Electric announced a significant stock repurchase plan, boosting its market position. Despite these gains, the broader luxury and utilities sectors faced challenges, demonstrating the market's ongoing volatility.