Europe midday: Shares up as Swiss slice rates; UK, Norway hold

The pan-regional Stoxx 600 index was up 0.47% to 516 after ending lower on Wednesday, hit by losses in real estate and technology stocks.

The Swiss National Bank cut its key rate to 1.25% from 1.5%.

"Inflation has risen slightly since the last monetary policy assessment, and stood at 1.4% in May," it said in a statement.

"Higher inflation in rents, tourism services and oil products has contributed in particular to this increase. Overall, inflation in Switzerland is currently being driven above all by higher prices for domestic services."

Norway's central bank kept interest rates unchanged on Thursday and warned that inflation will likely remain elevated for some time, with monetary policy likely to remain stable until at least the end of the year.

Norges Bank's Monetary Policy and Financial Stability Committee kept its main policy rate at 4.5% – a level which it has maintained since January.

Meanwhile in the UK, the Bank of England left interest rates on hold as expected, despite falling inflation. The Monetary Policy Committee voted by a majority of seven to two to keep the cost of borrowing at a sixteen year-high of 5.25%.

Data on Wednesday showed inflation fallen back to the BoE’s 2% target for the first time in three years. However, core inflation – which strips out more volatile elements such as food and energy – remains well above target, at 3.5%. Services inflation also remains stubbornly high, at 5.7%.

Markets are still watching politics in France as campaigning continues in the snap general election called by President Emmanuel Macron. The CAC 40 was up 0.93% to 7,640 in early deals.

In Germany, producer-price deflation in Germany softened in May to its lowest level in 11 months, according to data out on Thursday from the Federal Statistical Office, Destatis.

The producer price index (PPI) fell at an annual rate of 2.2% in May, following a 3.3% drop in April. The consensus forecast was for a decline of 2.0%.

Producer prices have been falling year-on-year since July 2023, though last month's decline was the lowest rate in the current cycle.

In equity news, Ocado shares slumped by almost 10% as the online grocer and warehouse tech group said the planned go-live of Canadian grocery retailer Sobeys' customer fulfilment centre in Vancouver had been paused and that the two have agreed to end terms related to mutual exclusivity.

German drug developer Evotec rallied surged 16% after a report it was speaking to advisers after a decline in its share price raised concerns about its vulnerability to a takeover.

Tate & Lyle fell as the company said it was buying US-based CP Kelco for $1.8bn. T&L shares were lower as they traded without entitlement to a dividend.

Upper Crust owner SSP fell after a downgrade to 'hold' from 'buy' at Berenberg.

British supermarket chain Sainsbury agreed to sell its core banking operations to NatWest.

Danone shares fell as the company left annual sales growth targets of between 3% and 5% over the next four years unchanged.

ASMI jumped 5% after Morgan Stanley upgraded the semiconductor equipment maker to 'overweight' from 'equal-weight'.

Reporting by Frank Prenesti for Sharecast.com