European stocks steady ahead of ECB and Bank of England rate decisions

Thursday 05 February 2026 - 15:50

By: Dakir Madiha

European stocks steady ahead of ECB and Bank of England rate decisions

European stock markets held steady Thursday as investors digested mixed corporate earnings and braced for policy decisions from two major central banks later in the day.

The pan-European STOXX 600 hovered around 618 points early in the session, near the record from the previous close. Germany's DAX and France's CAC 40 saw minimal moves while awaiting signals from the European Central Bank and Bank of England.

The ECB is widely expected to keep interest rates unchanged for a fifth straight meeting, with the deposit facility rate at 2 percent. This comes as eurozone inflation dipped to 1.7 percent in January, below the bank's 2 percent target for the first time since mid-2021. ECB President Christine Lagarde will hold a press conference after the announcement, where markets seek clues on future policy amid euro strength.

The Bank of England is also forecast to hold its benchmark rate at 3.75 percent, a three-year low, per a Reuters poll. Markets price less than 1 percent chance of a cut, with only one of 32 economists in a Bloomberg survey anticipating a reduction. The decision arrives amid persistent inflation worries, with the UK holding the G7's highest rate.

BNP Paribas shares rose over 4 percent after the eurozone's largest bank by assets reported Q4 net profit of 2.97 billion euros, up 28 percent year-over-year and beating analyst expectations. French bank CEO Jean-Laurent Bonnafé cited "excellent operational performance" while raising 2028 profitability targets.

Shell shares fell after the British oil giant posted adjusted Q4 profit of $3.26 billion, missing analyst forecasts of $3.53 billion. Full-year earnings dropped to $18.5 billion from $23.72 billion in 2024, hit by lower oil prices.

BBVA declined despite a 4.1 percent quarterly net profit rise to 2.53 billion euros, in line with estimates, weighing on Spain's IBEX index.

European tech stocks gained about 2 percent, rebounding from early-week weakness, boosted by Alphabet's strong results: quarterly revenue of $113.8 billion and earnings per share of $2.82, topping expectations.