European Shares Climb as Global Markets Respond to Federal Reserve's Move

European shares rose on Friday following gains on Wall Street, buoyed by the Federal Reserve's interest rate cut. The pan-European STOXX 600 increased by 0.3%, while banks led sector gains. Investors interpreted the Fed's less hawkish stance positively, shifting from defensive sectors to more dynamic investments.

European shares opened higher on Friday, bolstered by overnight gains on Wall Street where the S&P 500 closed at a record high. This boost came as investors globally welcomed the Federal Reserve's interest rate cut and remain optimistic about further decreases in 2026.

The pan-European STOXX 600 index was up 0.3% at 582.96 as of 0807 GMT, following its largest one-day surge in over two weeks. Major stock exchanges in the region also saw improvements, with Spain's IBEX climbing 0.6% and Germany's DAX increasing by 0.5%.

Banks were at the forefront of these gains, with a 0.9% rise. BNP Paribas notably climbed 1.5% after announcing exclusive talks to sell its 67% stake in its Moroccan unit BMCI to Holmarcom Group. Investors took note of Wall Street's rally, where both the S&P 500 and the Dow achieved record highs, influenced by the Fed's unexpectedly dovish comments.

(With inputs from agencies.)