European Markets Climbed After BoE's Historic Stimulus Announcement

(RTTNews) - The European markets ended Thursday's session in positive territory after the Bank of England announced a historic stimulus package. After the initial jump that followed the announcement, the markets pared their gains in choppy trading action in the afternoon. The early pull back on Wall Street was partly responsible, as investors remain cautious ahead of Friday's U.S. jobs report.

The Bank of England announced a massive package of policy measures, which included a reduction in the interest rate for the first time in more than seven years and an expansion in quantitative easing, to avert the risk of recession.

The bank also drastically downgraded its growth projections as the "Brexit" vote heightened uncertainty and the sharp depreciation in sterling triggered an upward revision to the inflation forecast.

Policymakers also expressed willingness to take interest rates to even lower levels, but signaled that the lower bound will be above zero.

The Monetary Policy Committee, governed by Mark Carney, unanimously voted on Thursday to cut the bank rate by 25 basis points to a fresh record low of 0.25 percent. This was the first reduction in rates since March 2009.

Policymakers voted 6-3 to expand the asset purchase program by GBP 60 billion to GBP 435 billion. Kristin Forbes, Ian McCafferty and Martin Weale voted against the proposition, preferring no change.

The bank slashed its GDP growth outlook for 2017 to 0.8 percent from 2.3 percent. Similarly, the projection for 2018 was trimmed to 1.8 percent from 2.3 percent.

The pan-European Stoxx Europe 600 index advanced 0.63 percent. The Euro Stoxx 50 index of eurozone bluechip stocks increased 0.73 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.66 percent.

The DAX of Germany climbed 0.57 percent and the CAC 40 of France rose 0.57 percent. The FTSE 100 of the U.K. gained 1.59 percent and the SMI of Switzerland finished higher by 0.89 percent.

In Frankfurt, industrial giant Siemens climbed 4.60 percent after lifting its full-year earnings guidance for the second time this year.

Rheinmetall jumped 3.15 percent. The defense contractor backed its FY16 outlook after posting higher operating profit and sales for the first half of 2016.

Reinsurer Hannover Re Group sank 4.38 percent after its Group net income for the first six months declined 8.6 percent from a year earlier.

In Paris, stationery and shavers group Societe BIC jumped 4.39 percent after confirming its 2016 financial outlook.

In London, Aviva surged 6.70 percent. The insurer raised its dividend after delivering a double digit increase in operating profits during the first half.

Betting firm Ladbrokes rose 4.26 percent after it swung to a pretax profit in the first half of 2016 due to strong growth in staking and favorable sporting results.

Gold miner Randgold Resources sank 3.84 percent after its second-quarter net income fell to $49 million from $53.6 million last year.

Drug maker Hikma plunged 16.79 percent after lowering its profit target for its generic business.

Network equipment maker Nokia dropped 1.25 percent in Helsinki after its second-quarter earnings before interest and taxes fell more than expected.

Germany's construction activity expanded for the eighteenth successive month in July, driven by sustained growth in residential building activity, survey figures from Markit Economics showed Thursday. The construction Purchasing Managers' Index, or PMI, rose to 51.6 in July from June's 10-month low of 50.4.

With the monthly jobs report looming, the Labor Department released a report on Thursday showing a modest uptick in first-time claims for U.S. unemployment benefits in the week ended July 30th. The report said initial jobless claims rose to 269,000, an increase of 3,000 from the previous week's unrevised level of 266,000. Economists had expected claims to edge down to 265,000.

While the Commerce Department released a report on Thursday showing a notable decline in new orders for U.S. manufactured goods in the month of June, the decrease was not quite as steep as expected. The Commerce Department said factory orders tumbled by 1.5 percent in June after slumping by 1.2 percent in May.

Economists had expected orders to plunge by 1.8 percent compared to the 1.0 percent drop originally reported for the previous month.