European stocks rebound on ECB rate cut anticipation

European stocks showed signs of recovery on Thursday as investors anticipated a dovish stance from the European Central Bank (ECB) along with processing a set of positive corporate earnings reports. The STOXX 600 index, which represents a broad range of stocks across Europe, saw an increase of 0.4% as of 0820 GMT. This uptick followed a two-day period of losses.

The ECB is widely expected to announce a reduction in interest rates by 25 basis points at 1215 GMT. Should this cut occur, it would represent the first instance of consecutive rate reductions by the ECB in 13 years, following a similar cut in September. As inflation rates decelerate and the economic condition of the bloc appears to worsen, market participants are keenly awaiting any hints from the ECB that might support their expectations of three more rate cuts extending through March 2025.

Julien Lafargue, the chief market strategist at Barclays (LON:BARC) Private Bank, mentioned the possibility of the ECB adopting a more direct approach in its communications, indicating the likelihood of future rate cuts. However, he also suggested that the bank might hold off on providing clearer guidance until after the U.S. elections.

Investors are also preparing for the release of September's inflation data from the eurozone, which will be made public prior to the ECB's policy announcement.

In corporate news, the Finnish bank Nordea's shares surged by 5.5% after it raised its financial forecast and unveiled a new share buyback program. This news bolstered the banking index, which climbed over 1% and became the leading sector of the day, benefitting from the historically high-interest rates.

Sartorius, a German company, saw its shares jump by 12%, making it the highest gainer in the STOXX 600 after reporting solid third-quarter results and reiterating its full-year outlook.

Airbus Group SE (EPA:AIR) experienced a 3% rise in its share price following the aerospace group's announcement of job cuts in its defence and space division, which could affect up to 2,500 positions.

The British company Rentokil Initial PLC (LON:RTO), specializing in pest control, announced its plans to boost organic growth in North America and reported a 3.6% increase in quarterly group revenue. The company's shares climbed by as much as 10%.

Schindler, a Swiss firm critical for assessing the real estate market's health, saw its shares increase by 2% after it reported an upturn in orders and sales for the third quarter.

Meanwhile, Nestle SA (SIX:NESN) shares recovered, gaining 2%, after initially dropping due to a sales miss and the company's projection of continued weak customer demand.

Conversely, Mondi PLC (LON:MNDI) shares fell by 7% following the British packaging company's report of a decline in third-quarter core profit. Additionally, Nokia (HE:NOKIA) experienced a 3% drop in its share price after announcing quarterly sales that fell short of market expectations.

Reuters contributed to this article.