European stock markets rise ahead of ECB meeting

European Central Bank president Christine Lagarde . Photo: John Thys/AFP via Getty Images

European stock markets opened higher on Thursday as traders looked ahead to the European Central Bank’s (ECB) meeting before noon.

In London, the FTSE 100 (^FTSE) was trading flat after the bell, flirting with the 7,000 points mark, while the French CAC (^FCHI) rose 0.4% and the DAX (^GDAXI) gained 0.8% in Germany.

Investors have their eyes firmly set on the ECB, which is expected to announce a more flexible strategy to deal with inflation.

It is the first meeting since the bank adopted its new strategy of targeting inflation of 2% and allowing temporary inflation overshoots when interest rates are at record lows.

At the last meeting it also upgraded its GDP forecasts for 2021, from 4% to 4.6%.

“Today’s European open looks as if it could well be a positive one ahead of today’s European Central Bank rate meeting, which given recent comments from ECB President Christine Lagarde, could prove much more insight into ECB policy over the next 18 months than had originally been thought two weeks ago,” Michael Hewson of CMC Markets said.

“With the Federal Reserve meeting also due next week the next few days are likely to be crucial ones in respect of future policy considerations as Delta variant infections rise across the world.”

Watch: What is inflation and why is it important?

A string of corporate news was also moving individual stocks on Thursday, with Go Ahead Group (GOG.L) up 2.5% on the back of an announcement appointing a new chief executive officer.

Meanwhile, Unilever (ULVR.L) slumped 4%, the biggest loser on the index in morning trading, after warning rising commodity costs would squeeze its full-year operating margin. However, it beat expectations with second-quarter sales growth, helped by higher prices and strong sales of ice-cream and teas.

Read more: Unilever reveals profit margin hit amid rising commodity prices

Across the pond, S&P 500 futures (ES=F) were up 0.2%, Dow futures (YM=F) likewise climbed almost 0.2%, and Nasdaq futures (NQ=F) were just more than 0.2% higher as trade began in Europe.

Later on Thursday, the latest US unemployment data is expected. US weekly jobless claims are forecast to fall modestly to 350,000 from 360,000.

Asian stocks rallied overnight despite outbreaks in unvaccinated populations and jitters around China’s regulatory crackdown on technology firms. Bonds nursed losses and oil held on to gains on Thursday as investors seemed to set aside coronavirus concerns.

MSCI’s broadest index of Asia-Pacific shares outside Japan took their lead from Wall Street, rising 1%, with broad gains from Sydney, Seoul and Hong Kong.

The Hang Seng (^HSI) rose 1.6% while the Shanghai Composite (000001.SS) was 0.3% higher and the Nikkei (^N225) climbed 0.6% in Japan.

Watch: What are SPACs?