European stock markets closed higher on Thursday (October 29), with the Stoxx 600 rising 0.8%, Germany’s DAX gaining 1.4%, France’s CAC 40 climbing 1.1%, the UK’s FTSE 100 adding 0.3%, and the Swiss Market Index advancing 1.2%. Investors reacted to the European Central Bank’s (ECB) decision to keep interest rates unchanged, while also monitoring developments regarding inflation and economic growth in the region.
The ECB maintained its three key interest rates but warned that rising energy prices are increasing inflation risks while simultaneously weighing on the growth outlook. Meanwhile, European economic sentiment indicators weakened in October, suggesting that the confidence of economic participants remains under pressure.
The ECB also announced that Christine Lagarde will conclude her term on February 7, 2027—earlier than previously scheduled. The search for her successor has already begun, bringing the prospect of a leadership transition at the ECB into focus for investors.
In the corporate sector, banking and energy stocks provided support to the market. Shares of UBS rose following news that the Swiss government is assessing the potential impact should the bank relocate its operations abroad. Meanwhile, Shell and TotalEnergies saw their shares climb after both companies reported third-quarter results that beat expectations and announced share buyback programs.
However, not all stocks performed well. Rio Tinto shares weakened following the launch of two lithium projects in Argentina, while Haleon shares plummeted by more than 15% after the company lowered its organic revenue growth forecast for 2026. HSBC also saw its shares decline following reports of discussions with an insurance firm regarding the transfer of credit risk related to data center financing.