European Stocks Rise Ahead of Expected Bank of England Rate Cut

UniCredit rises after the bank's chairman says asset sales won't address ECB capital demands, while BASF gains in Frankfurt on talk of the transfer of an agricultural unit to Monsanto.
By Laura Board ,

European stocks rose on Thursday amid expectations the Bank of England will today cut rates to shore up the post-Brexit vote economy.

Most analysts are expecting a 25 basis point cut at noon, London time, today. That would take the already historic-low benchmark rate down to 0.25% after more than seven years at 0.5%. Failure to act would likely dampen U.K. equities indices and curtail a rally on the internationally focused FTSE 100 which has taken the index into bull territory.

The FTSE 100 was recently up 1.00% at 6,740.42, while the Dax in Frankfurt was up 1.52% at 10,081.60 and in Paris the Cac 40 was up 1.11% at 4,383.42..

S&P 500 mini futures were recently up 0.58%.

UniCredit was up more than 4% in Milan.  UniCredit chairman Giuseppe Vita told Reuters the bank will have to consider a capital increase because asset sales concluded this week will not be enough to satisfy the European Central Bank.

Swedish bank SEB was up more than 1% after its second-quarter operating profit beat expectations

BASF (BASFY) was up 2.6% in Frankfurt after a Bloomberg report that Monsanto (MON) might acquire its agricultural solutions unit. Monsanto is fighting off a bid from Bayer and  Monsanto CEO Hugh Grant said earlier this month it was talking with other deal partners. Bayer was recently up more than 1%.

Recruitment consultant Hays was up almost 9% in London after forecasting that full-year operating profit will be ahead of expectations at £180 million ($238.2 million) because of currency wins.

GlaxoSmithKline (GSK) - Get Report was up 1% at 1,664.50 pence as Jefferies upgraded the stock to buy from hold with a price target of 2,000 pence.

Advertising company WPP edged higher after Liberum analysts cut their organic growth forecasts for the next three years but said currency benefits from the weaker pound will more than offset the decline. It reiterated its hold recommendation and a "cautious stance on agencies."

The pound was recently up 0.59% at $1.3224.

Brent crude was recently up 1.30% at $46.86 a barrel.

Gold and silver slipped back, while the yield on the benchmark 10-year government bond rose 4 basis points to minus 0.05%. That's the same yield at which Germany yesterday auctioned its first ever negative-yield bond, joining Japan in that club.

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