European stocks close at record high on tech rally, hopes for Fed rate cut

European shares closed at a record high for a second session on Thursday, driven by a rally in industrials and chip-related stocks, while expectations of U.S. interest rate cuts this month also buoyed sentiment.

The pan-European STOXX 600  index was up 0.5% at its record close, having earlier also hit an all-time intraday high. Most regional bourses also climbed, with Germany  leading gains with a 1.3% increase.

Industrial stocks  were the biggest boost to the index, up 1.5%, with heavyweights such as Siemens up 4.2% and Schneider  adding 2.3%.

Technology stocks  rose 2.3%, tracking gains in global chip-related stocks. Sentiment was further boosted after Korea's Samsung Electronics  and SK Hynix  signed letters of intent to supply memory chips for OpenAI's data centres.

ASML gained 4.3% and ASMI  jumped 6.5%, pushing the main Dutch index to a record high.

"I see further room (for the rally) to run judging from the breadth in the tech rally, as it's also the average tech stock participating as well," said Lale Akoner, global market analyst at eToro.

Autos  climbed 2.4%, boosted by an 8.3% gain in Stellantis  after market data showed an improved trend in new car sales for the group in Italy and the U.S.