(For a Reuters live blog on U.S., UK and European stock
markets, click or type LIVE/ in a news window)
* Italian banks cut losses to 2.9%
* Russian gas flow resumes via Nord Stream 1
* ASMI jumps on 'rock-solid' orders, consensus-beating
July 21 (Reuters) - Europe's STOXX 600 share index rose on
Thursday, boosted by a run of upbeat corporate results although
gains were limited as investors digested an oversized ECB
interest-rate hike amid growing worries about a recession.
In its first rate hike in 11 years, the European Central
Bank lifted interest rates to zero percent, breaking its own
guidance for a 25 basis point increase to tame inflation running
at a record high of 8.6%.
However, the central bank did not provide guidance for its
expected rate hike in September, saying only that further
increases will be as appropriate and decisions will be made
meeting by meeting.
"Today's decision shows that the ECB is more concerned about
(their) credibility than about being predictable. This matters
more than forward guidance," said Carsten Brzeski, global head
of macro at ING.
"We expect the ECB to deliver another rate increase by a
total of 50 bps before winter starts. Thereafter, we currently
don't expect further rate hikes. Instead of a long rate hike
journey, the ECB's policy normalisation currently rather looks
like a short trip."
The broader-pan European STOXX 600 index closed
0.4% higher after seesawing earlier in the session in the
aftermath of the ECB's decision and President Christine
In a bid to cushion the impact of the rise in borrowing
costs on the 19-country currency bloc's more indebted nations,
the ECB also unveiled a new tool, the Transmission Protection
Instrument, to limit financial fragmentation.
Italian banks pared losses to end 2.9% lower.
They had fallen up to 7.2% earlier in the day after Prime
Minister Mario Draghi resigned, pushing the country into fresh
An early election in September or October will be the most
likely outcome. Italy's benchmark FTSE MIB index which
had dropped almost 3% earlier in the day, closed 0.7% down.
Some relief on Thursday came from easing worries over an
energy supply crunch, as Russian gas flows resumed through Nord
Stream 1, the biggest pipeline between Russia and Germany.
Worries about an energy supply crunch in Europe, a weaker
euro and prospects that aggressive monetary policy tightening to
curb soaring inflation could spark a global recession have
rattled markets, with the STOXX 600 down 13% this year.
Viaplay Group jumped 11.1% after the Swedish
media group posted upbeat quarterly earnings and subscriber
ASM International surged 14% to top the STOXX 600
after the Dutch semiconductor supplier flagged new orders at a
record high as it published results in line with its forecast,
despite lingering supply-chain issues.
Publicis gained 5.1% after the world's
third-biggest advertising group raised its full-year outlook.
(Reporting by Susan Mathew and Devik Jain in Bengaluru; Editing
by Subhranshu Sahu and Arun Koyyur, Kirsten Donovan)