European shares rise on rate cut optimism; UK elections in focus

European shares rise: European shares climbed on Thursday, buoyed by optimism over potential interest rate cuts by the Federal Reserve following weak US data. London markets gained as voting began in the UK, with opinion polls predicting a historic win for the Labour Party.

The pan-European STOXX 600 index rose 0.3 per cent by 0710 GMT, led by gains in the banking sector. The automobiles sector added 0.8 per cent, mainly driven by German automotive supplier Continental, which jumped as much as 9.6 per cent.

The UK's FTSE 100 advanced 0.5 per cent as markets awaited the results of the Labour Party's anticipated large majority.

Weak US data boosted sentiment on rate cuts, as first-time applications for US unemployment benefits increased last week, indicating a cooling labour market. Additionally, German industrial orders fell unexpectedly in May, declining by 1.6 per cent from the previous month on a seasonally and calendar-adjusted basis.

Among other movers, Roche dropped 2.3 per cent after announcing plans to halt a trial for its experimental lung cancer drug due to lacklustre results. Sweden's Ericsson slipped 1.5 per cent after the telecoms equipment maker recorded another impairment charge of 11.4 billion Swedish crowns ($1.09 billion) in the second quarter of 2024.

(With Reuters inputs)