European Shares Rise Amid Bank Decision Anticipation

European shares experienced a modest increase on Thursday, with the pan-European STOXX 600 climbing 0.3% to 554.08 points amid uncertain trading. Investors were eagerly awaiting the European Central Bank's monetary policy decision and U.S. inflation data, key factors in determining the day's trading dynamics.

Defence stocks advanced by 0.8%, spurred by geopolitical tensions, particularly following Poland's interception of a suspected Russian drone. The European Central Bank's interest rate announcement at 1215 GMT is the day's main highlight, as investors seek insights into how political and trade challenges are shaping policy.

The rising concerns over fiscal policies have resulted in higher long-term bond yields and have pressured equities across Europe. France, under scrutiny for its fiscal strategy, saw its equities downgraded by Citigroup to 'neutral'. Despite the economic challenges, sectors like banks and real estate showed minor gains.

(With inputs from agencies.)