European shares rise as eyes fall on ECB 

It is expected ECB will ease borrowing costs by 25 basis points from the current record level of 4%

Investors are focused on the European Central Bank’s key rate decision on Thursday.

European shares gained, led by technology stocks including Dutch semiconductor equipment maker ASML, with focus shifting to the European Central Bank’s key rate decision on Thursday.

The pan-European Stoxx 600 closed 0.8% higher after falling around 0.5% in the last session, with the technology sector leading the charge with a 3.7% gain, its best single-day performance in over four months. 

ASML jumped over 8% after a Jefferies analyst report cited comments from CFO Roger Dassen suggesting he was positive about the possibility of orders coming through from top customer TSMC in the coming quarters. Other chip-related stocks BE Semiconductor Industries and ASMI were also up.

Investors are now focused on the ECB’s key interest rate decision, which is expected to see it ease borrowing costs by 25 basis points from the present record level of 4%.

“A 25 bps rate cut is well telegraphed and so the key question on investors’ minds will be the forward guidance on cuts for the rest of the year,” said JP Morgan Asset Management’s global rates portfolio manager Jason Davis.

“A decision on further cuts this year will ultimately come down to whether services inflation starts to fall from its current level of 4.1% — if the ECB want to remain data-dependent, this is probably the message they should send.” 

Elekta shares slumped 18% after the Swedish radiation therapy equipment maker posted a bigger than expected drop in fourth-quarter profit.

• Reuters