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European markets close higher as traders digest ECB rate hike; Ocado shares up 8%

Hannah Ward-Glenton

This is CNBC's live blog covering European markets.

Traders are digesting the latest moves by the European Central Bank.
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European stock markets closed higher on Friday as investors digested the latest monetary policy decision from the European Central Bank.

The pan-European Stoxx 600 index ended 0.5% higher, with most sectors and major bourses closing in positive territory. Household goods stocks led gains with a 1.8% uptick, while mining and technology stocks ended down 0.6% and 0.3%, respectively.

European markets


The ECB opted to raise its benchmark policy rate by a further 25 basis points. In a press briefing following the decision, ECB President Christine Lagarde said. "We are not thinking about pausing."

"Are we done? Have we finished the journey? No, we are not at [the] destination," she added, indicating at least one more rate increase in July.

While the ECB opted for more fiscal tightening, the Federal Reserve decided Wednesday to hold off on a rate hike, but said there would be two quarter-percentage-point moves before the end of the year.

U.S. stock futures were mixed as investors shifted focus from the Federal Reserve policy meeting earlier in the week to consumer sentiment data released Friday. Meanwhile, Asia-Pacific markets were higher as the Bank of Japan again left its benchmark interest rate unchanged at -0.1%.

Stocks on the move: Travis Perkins down 5%, Ocado up 9%

Shares of British building materials supplier Travis Perkins fell 5% Friday after it issued a profit warning on the back of weakness in the U.K. housing market.

On the other end of the Stoxx 600, supermarket group Ocado rose 9%, continuing an uptick in the company's share price over recent weeks.

— Karen Gilchrist

U.S. markets open higher

U.S. markets opened higher Friday as investors digested the Fed's decision earlier this week to pause its interest rate hikes.

The Dow Jones Industrial Average was up 0.3% in early deals while the Nasdaq Composite was also up 0.5%. The S&P 500 was also 0.4% higher and up 3% on the week, marking its best performance since March.

— Karen Gilchrist

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Two-year UK gilts reach 15-year high

U.K. two-year gilt yields hit their highest point since April 2008 on Friday, extending gains made across previous sessions.

Yields on the 2-year government bond hit 4.935% in morning trading, according to Refinitiv data.

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British 2-year gilt.

The rise in bond yields, which move inversely to prices, comes as the U.K. reported hotter-than-expected economic data in the last week.

— Hannah Ward-Glenton

Sterling nears 14-month high against U.S. dollar

The British sterling teetered on a 14-month high as it hit 1.2817 against the U.S. dollar, extending gains made in previous sessions.

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GBP/USD moves.

The currency has rallied recently thanks to better-than-expected economic data and a weakened greenback, with Bank of England expectations turning more hawkish, while the U.S. Federal Reserve continues to strike a more cautious tone.

— Hannah Ward-Glenton

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"Our view is that you want to be risk on this year," he added, naming stocks to buy.

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India is a 'fantastic' place for manufacturing as more countries adopt 'China plus one' strategy, says portfolio manager

More countries are reducing their reliance on China, and India could be the next best bet for nations looking to move their manufacturing operations, said Matthew Culley, portfolio manager at Janus Henderson Investors.

"The long-term outlook for India is clearly positive and it's the only country that is blessed with the demographics to rival China on the global stage," Culley told CNBC's Squawk Box Asia on Friday.

India is hence a "fantastic place" for countries looking to move away from China due to its strong economic background and cheap labor, he added.

Culley highlighted that the South Asia nation is now beginning to see "green shoots of private sector capex," and banks will play a pivotal role as well.

"There is a ton of infrastructure that has to get done, because it's not just about building a manufacturing facility ... you really need the whole supply chain to be replicated in order for it to be successful."

— Charmaine Jacob

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Bank of Japan leaves rate unchanged, holding them at ultra low levels

Japan's central bank maintained its ultra loose monetary policy on Friday, electing to support fragile economic growth at a time of swirling global uncertainty.

The Bank of Japan held its short-term interest rate target at -0.1% and made no changes to its yield curve control policy, in line with economists' expectations.

The Japanese yen declined after the decision, falling by as much as 0.3% to around 140.70 per U.S. dollar before paring losses. The Nikkei 225 similarly reversed earlier losses to creep higher.

— Clement Tan

European markets: Here are the opening calls

European stock markets are expected to open mixed Friday.

The U.K.'s FTSE 100 will see a 3.7-point uptick to 7,634.6, according to IG data, while Germany's DAX 40 index will be up 9 points to 16,302.9. France's CAC 40 index will drop 0.9 points to 7,288.2, while Italy's MIB 40 will shed 24.1 points to 27,688.4.

— Hannah Ward-Glenton