Europe open: Shares rally as eyes turn to rate decisions

(Sharecast News) - European shares rallied at the open on Thursday as investors eyed rate decisions from the UK, Switzerland and Norway. The pan-regional Stoxx 600 index was up 0.35% to 515.96 after ending lower on Wednesday, hit by losses in real estate and technology stocks.

The Bank of England and Norges Bank are expected to keep rates on hold while the Swiss National Bank is mulling a second cut in rates after March's quarter-point reduction.

"Expectations are for (UK) interest rates to stay put at their historically high levels, despite encouraging inflation data. While inflation has moved swiftly down to target levels, there are signs that economic activity remains too hot," said Hargreaves Lansdown analyst Sophie Lund-Yates.

"One fly in the ointment comes in the form of services price inflation, which has fallen less than the Bank of England expected. Private-sector wage growth is also almost twice the rate deemed compatible with 2% inflation. The truth remains that further evidence of softer data is likely required before policymakers are prepared to take the secateurs to interest rates."

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 0.59% to 7,612 in early deals.

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

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

Reporting by Frank Prenesti for Sharecast.com