European stocks rallied to close higher Thursday afternoon after the European Central Bank (ECB) provided the market with clues on the end of its massive bond-buying program.
The pan-European Stoxx 600 pushed higher during afternoon deals to close 1.4 percent in the green, despite negative trade in the morning. All major bourses and business sectors were positive.
The ECB outlined plans to end its massive stimulus program by the end of 2018, but also claimed interest rates won’t likely budge for more than a year. This “dovish” end to its stimulus program led to a fall in the euro and a rise in stocks. Both France’s CAC and the German DAX closed up approximately 1.5 percent on the news.
Looking across the European benchmark, Aveva shares led the gains, trading in the double digits throughout the day and closing up 12 percent. The company reported a full-year adjusted pretax profit of over 23 percent.
WPP shares fell following a heated annual general meeting in the previous session. Thirty percent of shareholders voted against a pay proposal involving the former chief Martin Sorrell, who left the company in April following an allegation of misconduct. Almost 17 percent of shareholders were also against the re-election of chairman Roberto Quarta. The media giant’s stock closed down 0.4 percent.
Volkswagen shares closed 2.2 percent to the upside, though they were negative earlier in the session after the German carmaker was fined 1 billion euros over its diesel emissions scandal. German prosecutors have said that VW sold over 10 million cars with a cheating software that understated diesel emissions. Volkswagen accepted the verdict, saying it won’t appeal against it. This is one of the highest ever fines imposed by German authorities on a company.
Meanwhile, Rolls-Royce remained near the top of the benchmark throughout the day, closing 6.5 percent higher as it announced plans to slash 4,600 jobs to streamline the business. The U.K. listed engineer said the cuts, which represent around 9 percent of its workforce, will help the engine maker meet its free cash flow target through cost savings of around 400 million pounds.
Shares of Unilever slumped after warning its first-half sales will come in below its 3 to 5 percent full-year target. The Anglo-Dutch firm also said that it is “extremely unlikely” to remain listed in the FTSE after consolidating its headquarters in the Netherlands. Unilever’s stock closed 2.8 percent lower.
The Nasdaq composite rose half a percent on Thursday as technology and media shares were lifted by dealmaking activity. The S&P 500 also rose 0.1 percent, with tech as the best-performing sector. Meanwhile, the Dow Jones industrial average traded 29 points lower as bank shares declined.