European stocks mixed as DAX, CAC 40 rise while FTSE 100 falls

European equities ended Thursday's session with a mixed tone, as gains in major continental indices were partly offset by weakness in the UK market. The German DAX led the advance, rising 0.37%, while France's CAC 40 added 0.44%. The broader Euro Stoxx 50 outperformed, gaining 1.39% on strength in large-cap stocks across the euro area. In contrast, the UK's FTSE 100 fell 1.04% after the Bank of England kept interest rates unchanged, disappointing some traders who had hoped for a dovish shift. Southern European markets were little changed, with Spain's IBEX 35 and Italy's FTSE MIB posting modest declines.

The divergence between continental European and UK equities reflects differing monetary policy expectations. The Federal Reserve's more hawkish stance this week has weighed on global risk sentiment, but European markets appeared to look past that, focusing instead on domestic economic resilience. The Bank of England's decision to hold rates, however, reinforced the view that UK monetary policy remains relatively tight compared to the euro area, where the European Central Bank is expected to cut rates later this year. This policy divergence is a key driver for currency traders: a more hawkish BoE relative to the ECB could support the British pound against the euro, while a risk-off mood tends to benefit the US dollar. For the latest exchange rates, traders can monitor real-time quotes on NowPrice.

Looking ahead, market participants will watch for further central bank commentary and upcoming economic data. Eurozone PMI readings due next week will provide clues on the health of the region's economy, while UK inflation data will influence BoE rate expectations. Any shift in the Fed's rhetoric or US economic data could also alter the global risk backdrop. Traders should remain alert to cross-asset correlations, as equity moves often spill over into currency markets, especially during periods of policy divergence.