Fed’s quarter-point rate hike reaction

The European Central Bank has announced that it will raise its interest rate by 50 basis points, bringing its policy rate to 2.5%.

The pan-European 600 index reacted by jumping from an increase of 0.5% on the day to 0.9% in the 15 minutes after the announcement.

The rate increase was in line with expectations and follows four increases in 2022.

Full coverage of the ECB’s decision can be found here.

— Hannah Ward-Glenton

Italian luxury car producer Ferrari reported a 16% year-over-year increase in adjusted core earnings for 2022, pointing to an “even stronger” year ahead.

The company said its adjusted earnings before interest, tax, depreciation and amortization (EBITDA) reached 1.77 billion euros ($1.95 billion) last year, setting guidance of 2.13 -2.18 billion euros for 2023.

Ferrari posted EBITDA of 469 million euros in the fourth quarter, up 18% on the year — beating analysts’ expectations by closer to 449 million euros, according to a Reuters poll.

Car deliveries increased 19% year-on-year to 13,221 units in 2022, led by deliveries of the Ferrari Portofino M and the SF90 family, along with the 296 GTB and 812 Competizione models, which were in the phase of ‘ramp-up.

“These figures provide the basis for an even stronger 2023, fueled by persistently high demand for our products around the world,” said Ferrari CEO Benedetto Vigna.

The company’s New York-listed shares were up 2.63% in after-hours trading by 12:46 am London time.

— Ruxandra Iordache

The Bank of England on Thursday raised interest rates by 50 basis points and reversed some of its earlier bleak economic forecasts.

The Monetary Policy Committee voted 7-2 in favor of a second consecutive rate increase of half a point, taking the main Bank rate to 4%, but indicated in its decision statement that smaller increases of 25 basis points may be on the cards in the following meetings. The two dissenting members voted to leave the rates unchanged.

Crucially, the Bank also dropped the word “strongly” from its rhetoric about continuing to raise rates as needed to curb inflation.

The UK’s FTSE 100 index rose 0.5% after the announcement, extending earlier gains.

Read the full story here.

— Elliott Smith

Tanate Phutrakul, ING’s chief financial officer, discusses its better-than-expected fourth-quarter net profit.

Telecom Italia shot to the top of European stocks in early trade, rising 11% after reports that US private equity firm KKR & Co Inc was preparing to make a non-binding offer for the network its landline.

The network provides key support for the struggling company’s massive debt load, Reuters reported.

Meanwhile, Electrolux fell 8.5% after warning it would see lower sales this year and could suffer on higher energy and labor costs.

— Jenni Reid

Europe’s Stoxx 600 was 0.5% higher at the open as investors braced for interest rate hike decisions from the Bank of England and the European Central Bank this afternoon.

This follows a decline in the last three sessions. After the European close on Wednesday, the US Federal Reserve announced a smaller rate hike of 25 basis points – but gave few hints its hiking cycle was coming to an end.

Germany’s DAX rose 0.65%, France’s CAC 40 rose 0.6% and the UK’s FTSE 100 rose 0.2%.

Deutsche Bank reported its 10th straight quarter of profit, which received a boost from higher interest rates and favorable market conditions.

The German lender reported a net profit of 1.8 billion euros ($1.98 billion) attributable to shareholders for the fourth quarter, bringing its annual net income for 2022 to 5 billion euros, a 159% increase from the previous year.

It nearly doubled a consensus estimate among analysts polled by Reuters of net profit of 910.93 million euros for the fourth quarter, beating a projection of 4.29 billion euros in the year.

Read the full story here.

JPMorgan named five stocks to own amid an expected rally in the broader Chinese stock market in February.

Strategists at the Wall Street bank attributed last week’s sell-off in Hong Kong-listed shares to profit-taking by some investors.

They said the broader stock market will be “grinding higher” this month but rotates in “consumption quality laggards as well as cyclical value and growth spaces.”

CNBC Pro subscribers can read more about the 5 stocks that JPMorgan named.

— Ganesh Rao

Forget growth stocks like technology. Analysts are recommending that investors go for cash-rich companies.

The market rallied in January — including the tech-heavy Nasdaq Composite, which rose nearly 10.7% last month for its best monthly performance since July.

But analysts say companies with pricing power are a safer bet than technology, given inflation is expected to remain high this year and uncertainty over when the US Federal Reserve will will combine interest rates.

They named three stocks to buy.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Shares in Alibaba have enjoyed a strong rebound this year, although a recent drop in its share price has some investors worried.

But the Wall Street favorite is far from the only game in town, with several stocks also offering exposure to the Chinese Internet sector.

Pro subscribers can read more here.

— Zavier Ong

European markets are headed for a higher open on Thursday as markets react positively to the US Federal Reserve’s quarter point rate hike.

The United Kingdom FTSE 100 index is expected to open 31 points higher at 7,788, of Germany DAX 101 points higher with 15,273, of France CAC up 35 points with 7,109 and of Italy FTSE MIB up 121 points at 26,870, according to data from IG.

On Thursday, investors in Europe will be focused on the latest monetary policy decisions from the European Central Bank and the Bank of England.

It’s a busy day for earnings with Shell, BT Group, Deutsche Bank, Banco Santander, ABB, Julius Baer and Roche reporting.

— Holly Elliott