European Markets Mixed as Central Bank Decisions Loom; Hapag-Lloyd Faces Geopolitical Strains

European stock markets showed mixed performance on Thursday, with investors focusing on key central bank decisions, including those from the Bank of England (BOE), the Swiss National Bank (SNB), and Sweden’s Riksbank. The regional Stoxx 600 index edged up 0.12%, while major national indexes diverged. France’s CAC 40 fell 0.2%, while the UK’s FTSE 100 rose by 0.35%. Despite recent gains, the market remained cautious ahead of anticipated rate announcements, following a volatile week.

The SNB reduced its interest rate by 0.25%, bringing it to 0.25%, in response to a near four-year low in Swiss inflation of just 0.3%. This rate cut follows previous reductions, as the Swiss central bank continues to adapt to a subdued inflationary environment. Meanwhile, the Swiss franc remained stable against the euro but slightly weakened against the US dollar after the announcement, reflecting investor reactions to the easing policy.

German shipping giant Hapag-Lloyd reported a 19% drop in annual profits, citing a challenging market environment and geopolitical tensions. Despite a rise in revenue to $20.67 billion, the company warned of lower income in 2025, highlighting disruptions in global trade routes due to geopolitical instability. Shares of Hapag-Lloyd fell 5% following the announcement, signaling investor concern over the shipping sector’s outlook amid fluctuating freight rates and ongoing global uncertainties.

As global central banks prepare for key rate decisions, including the BOE’s anticipated hold on rates despite weak UK economic growth, inflation and wage data remain in focus. UK wages grew by 5.9% year-on-year, contributing to concerns about inflationary pressures. With the BOE facing the delicate balance of managing inflation without stifling economic recovery, its upcoming decision will be closely watched, especially in the context of global economic trends.

source: cnbc