ECB Rate Hike Expected as European Stocks Hold Steady Near Two-Month Lows
European stocks held steady near two-month lows on Thursday as investors awaited the European Central Bank's (ECB) widely anticipated rate hike. The pan-European STOXX 600 was little changed, with some readings showing a 0.1% gain and others at break-even by 8:38 GMT. Germany's DAX traded flat, London's FTSE edged up 0.1%, and France's CAC 40 advanced 0.3%.
The muted tone followed Wednesday's 1.4% slide, the largest daily drop in two months, triggered when Brent crude broke through the $100 threshold for the first time since July. The spike reignited concerns that persistent energy costs could force policymakers to keep borrowing costs elevated well into next year.
The ECB is expected to lift its deposit rate by 25 basis points to 2.5% when it announces its decision at 12:15 GMT, with President Christine Lagarde's press conference scheduled 30 minutes later. Markets have fully priced in the move and are betting on at least one additional hike before year-end, followed by one or two more in 2027.
Oil prices eased slightly on Thursday but Brent remained above $100 as traders braced for deeper supply disruptions following the largest wave of attacks on shipping between Iran and the United States since their six-month-old conflict began. European energy shares gained 0.3%, supported by the elevated crude prices.