European stocks ended on Thursday in positive territory as investors celebrated the Bank of England's (BoE) latest decision to cut the U.K.'s key interest rate to a record low of 0.25 percent. The pan-European STOXX 600 came off session highs, closing up 0.67 percent provisionally. All sectors posted solid gains by the close, with the exception of chemicals, which closed lower. The U.K.'s FTSE 100 pushed ahead after the BoE's latest policy move, closing up 1.59 percent, while the domestically-focused FTSE 250 index jumped 1.45 percent. Meanwhile, France's CAC 40 and Germany's DAX also edged higher, both ending 0.57 percent higher. On Thursday, the BoE cut rates for the first time since 2009 by 25 basis points, slashed growth forecasts and said it would expand its program of government bond purchases, known as quantitative easing, to help prop up the British economy. "Some of the adjustments to this new reality may prove difficult and many will take time, but the U.K. can handle change (as) it has one of the most flexible economies in the world," said Mark Carney, governor of the central bank at a press conference. "We cannot immediately or fully offset the economic impacts of a large structural shock, however monetary policy can support the necessary adjustments of the U.K. economy during a period of heightened uncertainty, and that's why at its meeting yesterday the MPC agreed an exceptional package of measures," Carney said, adding that by acting early, the bank can reduce uncertainty, bolster confidence and support the necessary adjustments in the U.K. economy. The news by the central bank helped lift stocks in both the U.K. and elsewhere in the world, with U.S. markets opening higher on the back of the announcement, however by Europe's close, stocks saw signs of sluggishness as weak performance in financials and energy weighed. Meanwhile, sterling slumped on the back of the announcement, off 1.4 percent against the U.S. dollar, at $1.3132 at 16.30 p.m. London time. Despite the further easing measures in the pipeline, some have questioned whether it will make a difference. "The uncertainty created by the Brexit referendum result cannot be addressed by small changes in interest rates or other monetary measures," Andrew Sentance, senior economic adviser at PwC, said in a note after the decision. "It requires a political response from the government, to make clear the nature of our future relationship with the EU - which will inevitably take time. There are some circumstances when a central bank can do little to offset the shock to the economy and the resulting uncertainty, and that is the case now." Earnings: Siemens jumps 4.5%; Aviva pops 6.7% Aside from the major central bank news, earnings were also a key market mover during Thursday's session. German engineering firm Siemens rallied 4.5 percent after it reported better-than-expected results for the third quarter on Thursday and raised its guidance for 2016 as a whole. Meanwhile in the insurance space, Aviva posted a 13 rise in first-half operating profit, helped by a boost in its life insurance unit, sending shares near the top of the STOXX 600, up 6.7 percent. Germany's Hannover Re meanwhile posted a sharp fall in second-quarter net profit, but reaffirmed its goals for 2016, sending shares to the bottom of Europe's benchmarks. Closing down 4.76 percent. And RSA Insurance Group said group operating profit was up 20 percent in the first half of the year, helping push shares to close just shy of 1.5 percent up. Nokia closed in the red after the network equipment maker reported earnings before interest and taxes (EBIT) of 332 million euros ($370 million) in the second quarter, missing analyst forecasts of 400 million, while sales fell 11 percent year-on-year. Precious metals miner Randgold Resources posted a fall in production in the second-quarter, sending shares nearly 11 percent lower, which weighed on the basic resources sector along with Fresnillo. Shares have since pared, closing down 3.8 percent, boosted by spot gold which saw its price rise after the BoE decision. Shares of sportswear group Adidas finished down 2 percent despite reporting an improvement in second-quarter sales and margins at the golf business it is trying to sell; Reuters reported. Source: CNBC
