The Dax jumped to a record high of 18,177.90 points on Thursday. In Japan, the leading Nikkei index also closed higher than ever, following the price gains on Wall Street. "The prospect of globally falling capital market interest rates is grist to investors' mills," said analyst Timo Emden from Emden Research. The botched comeback of perfumery chain Douglas caused a frown on the German stock market, with its shares falling significantly despite the friendly stock market environment.

The Dax halved its gains in the course of the morning and was still up 0.5 percent at 18,101 points, while the EuroStoxx50 gained 0.6 percent to 5031 points. Strategists warned against an exaggeration on the stock markets in which valuations and risks are ignored. "Such developments often occur at the end of a strong upward movement," said Jochen Stanzl from CMC Markets.

The prospect of falling interest rates drove the price of gold to a record high of 2222.39 dollars per troy ounce. The US Federal Reserve had kept the key interest rate stable in the range of 5.25 to 5.50 per cent and at the same time signalled three interest rate cuts for 2024. Many stock market participants had been concerned that the rise in inflation at the beginning of the year could dissuade the Fed from its course. Industrial metals such as copper also moved into portfolios. The dollar index rose by 0.2 percent to 103.43 points. The yield on German government bonds fell from 2.435 percent to 2.396 percent.

INTEREST RATE HAMMER IN SWITZERLAND - FRANC SINKS

The Swiss National Bank (SNB) is already one step ahead of the other major central banks and surprised investors with its first interest rate cut since 2015. The SNB's key rate was reduced by 0.25 percentage points to 1.50 per cent. As a result, the Swiss franc fell to its lowest level against the euro since July. The dollar appreciated by around one percent to 0.8940 francs. "With the interest rate cut, the SNB is also taking into account the fact that the franc has appreciated in real terms in recent months, which is having a negative impact on the economy," said Brian Mandt from Luzerner Kantonalbank. The leading Swiss index SMI gained 0.7 percent.

The British central bank will also decide on the prime rate on Thursday. It is dealing with stubbornly high inflation and is therefore likely to stick to its tight line, according to experts. The Turkish central bank is also likely to leave its key interest rate unchanged at 45%. However, most economists expect a further rate hike later in the year.

PRO7 ON A HIGH - A LOW BLOW FOR DOUGLAS

On the European stock market, interest rate-sensitive sectors such as technology and real estate were among the biggest winners. Chip stocks such as Infineon and STMicroelectronics also benefited from encouraging figures from US semiconductor manufacturer Micron.

Split-up fantasies boosted ProSiebenSat.1 shares by five percent. The major Italian shareholder MFE-MediaForEurope is increasing the pressure on the Executive Board to spin off the dating and e-commerce business.

There were long faces in the trading rooms due to the botched return of Douglas shares to the stock exchange. The share price slipped to 23.20 euros after an issue price of 26 euros. "This is a blow for the share culture in Germany and does not reflect well," said one trader. In his opinion, the syndicate banks had not reacted sufficiently to critical voices during the preparations.

(Report by Anika Ross, edited by Kerstin Dörr. If you have any queries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)