Published by Global Banking and Finance Review
Posted on December 18, 2025
By Ragini Mathur and Purvi Agarwal
Dec 18 (Reuters) - European shares were largely muted on Thursday as declines in heavyweight healthcare and financials limited broader gains and investors stayed cautious ahead of the European Central Bank's policy announcement and U.S. inflation data.
The pan-European STOXX 600 was up 0.2% at 580.77 as of 0932 GMT. Major regional bourses were broadly higher, with Germany's DAX up 0.1%.
In London, the FTSE 100 gained 0.1% ahead of the Bank of England's rate decision, where markets widely expect a 25-basis-point cut. Bets were amplified after Wednesday's surprising drop in UK inflation.
Investors refrained from placing big bets ahead of the U.S. inflation report for November, which could provide clarity on the Fed's monetary policy trajectory, after employment data earlier this week failed to shift market expectations significantly.
In the market, retail stocks rose 1.2%, with budget fashion giant H&M up 2.3%. Consumer giants such as Nestle and Unilever also gained.
Energy shares were up 0.4%, as oil prices continued to rise. BP gained marginally after it appointed Meg O'Neill, the head of Australia's Woodside Energy, as its next CEO.
Healthcare shares slipped 0.1%, as heavyweights Novo Nordisk and AstraZeneca declined about 0.5% each.
Banks, among the biggest gainers this month, were down 0.2%.
The ECB's monetary policy meeting, in which it is widely expected to hold rates, is also on the radar. Investors remain keenly focused on the bank's forward guidance, particularly after board member Isabel Schnabel recently hinted at potential rate hikes.
"It's not unimaginable for the next interest rate to be up... But it's interesting to hear policymakers have that sort of level of confidence that they think that their easing process is largely done," said Iain Barnes, chief investment strategist at Netwealth.
"In the face of everything that's going on with the Fed and its incoming chair, it's just the ECB giving more clear guidance to the market."
U.S. President Donald Trump, scheduled to announce his pick for the next Fed chair soon, said on Wednesday that it would be "someone who believes in lower interest rates by a lot".
Equity indexes in Sweden and Norway were flat after their central banks kept interest rates on hold.
Among other movers, airport operator Aeroports de Paris fell 8.2% to the bottom of STOXX 600 after the French transport regulator, ART, rejected its 2026 tariff proposal.
Kitchen appliances maker Rational AG rose 4.2%, among top gainers on STOXX 600, after UBS upgraded the stock to "buy" from "neutral".
(Reporting by Ragini Mathur and Purvi Agarwal in Bengaluru; Editing by Janane Venkatraman)
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