European stock markets edged higher on Thursday as investors anticipated a potential interest rate cut from the European Central Bank (ECB), following the Federal Reserve’s decision to maintain US borrowing costs.

The ECB’s announcement comes amid signs of economic stagnation in the eurozone, with recent data showing the region’s economy stalled in the final quarter of 2024. Germany and France, the bloc’s two largest economies, both contracted, adding to concerns about growth prospects.

Asian markets closed mixed in thin holiday trading, with investors reacting to earnings reports from major tech firms. While Meta, IBM, and Tesla posted strong results, Microsoft underwhelmed, and Apple is set to report later Thursday.

Meanwhile, US Federal Reserve Chair Jerome Powell signaled no immediate plans to cut interest rates, despite calls from former President Donald Trump for lower borrowing costs. Trump has also hinted at potential tariffs, a key concern for the eurozone’s economic outlook.

As of 0930 GMT, major European indexes were trading higher, with London’s FTSE 100 up 0.2%, Paris’ CAC 40 gaining 0.5%, and Frankfurt’s DAX rising 0.3%. In the currency markets, the euro dipped against the dollar, while oil prices saw slight declines.

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