European stock markets closed higher on Thursday, supported by increased bets that the U.S. Federal Reserve will move towards cutting interest rates soon, along with a decrease in pressures in the bond market.
The Stoxx 600 European index rose by 0.66% to reach 550.39 points, while the media and telecommunications sectors led the gains with an increase of nearly 1.9% each.
This support came after weak data from the U.S. labor market, as private sector employment figures for August showed lower than expected growth, reinforcing market expectations that the Fed will move towards cutting rates in September. Investors are awaiting the upcoming non-farm payroll data tomorrow, Friday, to confirm these trends.
In the bond market, yields on government debt in the eurozone fell, with 30-year German bond yields dropping to 3.34%, while their French counterparts fell to 4.40%, after recently hitting their highest levels since 2009.
Despite the overall positive performance, some sectors faced pressures:
The French CAC 40 index fell by about 0.3%.
Shares of luxury goods companies such as Burberry, Christian Dior, and LVMH lost between 2.8% and 4.2% affected by declines in Chinese markets and reports of Beijing's intervention to curb rising stocks.
The European luxury goods index fell 1.24%, while the travel and leisure sector declined by 0.8% with Ryanair and easyJet shares falling by about 3.2% and 4.2% respectively.
Some major European companies also recorded notable losses:
Sanofi's stock dropped 8.3% after disappointing market results regarding an experimental drug for treating inflammation.
Volvo Cars' stock fell 3.3% after its sales declined by 9% in August compared to the previous year.
CVC Capital Partners' stock declined 6.3% following the announcement of half-year results.
