European shares advance as Fed begins easing cycle with jumbo rate cut Reuters

(Reuters) – European shares rose nearly 1 percent on Thursday after the U.S. Federal Reserve cut interest rates by 50 basis points and signaled further easing would be measured, raising hopes of a soft landing for the U.S. economy.

The mainland-wide index was up 0.9 percent at 519.15 points as of 0712 GMT, with all sectors trading higher except telecoms which was down 0.6 percent.

The US central bank kicked off its monetary easing cycle on Wednesday with a jumbo cut that brought the benchmark policy rate to 4.75%-5.00%.

Fed Chairman Jerome Powell said this was meant to show policymakers’ commitment to keeping the unemployment rate low now that inflation has eased.

Investors will now be keeping an eye on the Bank of England’s rate decision at 1100 GMT, with Britain’s benchmark index up 0.9% ahead of the verdict.

Among stocks, Next climbed 4.4 percent on Thursday as the British clothing retailer is on track to post an annual profit of nearly 1 billion pounds ($1.3 billion) after raising its outlook for second time in two months.

British online grocer Ocado ( LON: ) rose 12.6% after Ocado Retail raised its 2023-2024 forecast following a 15.5% rise in its revenue.

Shares in IG Group fell 2.7% as the company traded without rights to its latest dividend payment.