Volkswacht Bodensee - European stock markets rise before ECB rate call

The ECB announcement will follow the Federal Reserve's decision to keep US borrowing costs on hold Wednesday as inflation, despite coming down, remains elevated in the United States.

Asian stock markets closed mixed in more holiday-thinned trading, with investors digesting broadly positive earnings from tech giants that came days after their valuations tumbled as Chinese firm DeepSeek took the global AI scene by storm.

The tepid performance in Asia followed a retreat on Wall Street but the volatility that greeted the start of the week disappeared.

Wednesday saw a broadly upbeat readout, with Facebook-parent Meta, IBM and Tesla posting healthy earnings, though Microsoft disappointed. Apple is due to report Thursday.

With the ECB seen certain to cut eurozone interest rates, focus will be on president Christine Lagarde's press conference.

Ahead of the central bank's announcement, official data showed the eurozone economy stalled in the last three months of 2024, performing worse than expected as top economies Germany and France contracted.

Analysts at Bloomberg and FactSet had forecast the single-currency area's economy to grow by 0.1 percent compared to the previous quarter.

Germany's economy retreated by 0.2 percent while French output shrank 0.1 percent, both worse than forecast, with both countries mired by political turmoil.

Kathleen Brooks, research director at XTB trading group, said US President Donald Trump's tariffs were also "the key threat for the eurozone economy right now".

"Although Trump has spoken out about universal tariffs and has signaled that he is not happy with the eurozone's trade surplus with the US, he has not specifically mentioned tariffs for the currency bloc, unlike Mexico and Canada".

- Fed holds -

While the ECB is set to cut rates, the Fed chairman Jerome Powell said the US central bank was in no "hurry" to adjust its borrowing costs again.

Trump -- who last week revived his criticism of the Fed and Powell and called for rates to "drop immediately" -- accused policymakers of failing "to stop the problem they created with inflation".

Powell said it was "not appropriate" for him to respond to the comments, adding that decision-makers would "wait and see" how Trump's plans to impose tariffs, and cut taxes, regulations and immigration would affect the economy.

- Key figures around 0930 GMT -

London - FTSE 100: UP 0.2 percent at 8,576.74 points

Paris - CAC 40: UP 0.5 percent at 7,908.61

Frankfurt - DAX: UP 0.3 percent at 21,696.53

Tokyo - Nikkei 225: UP 0.3 percent at 39,513.97 (close)

Hong Kong - Hang Seng Index: Closed for a holiday

Shanghai - Composite: Closed for a holiday

New York - Dow: DOWN 0.3 percent at 44,713.52 (close)

Euro/dollar: DOWN at $1.0410 from $1.0425 on Wednesday

Pound/dollar: UP at $1.2449 from $1.2444

Dollar/yen: DOWN at 154.40 yen from 155.15 yen

Euro/pound: DOWN at 83.62 pence from 83.68 pence

West Texas Intermediate: DOWN 0.5 percent at $72.29 per barrel

Brent North Sea Crude: DOWN 0.5 percent at $75.25 per barrel

burs-bcp/lth

S.Leonhard--VB