The pan-European STOXX 600 index ended 0.3% higher, having snapped a five-day winning streak on Tuesday, with all the major regional bourses recording gains
European shares rose on Wednesday, led by automobile stocks, while investors awaited the minutes of the U.S. Fed’s July meeting to gauge the direction of monetary policy.
The pan-European STOXX 600 index ended 0.3% higher, having snapped a five-day winning streak on Tuesday, with all the major regional bourses recording gains.
Automobile led sectoral gains with a 1.4% rise, advancing for the seventh consecutive day, while basic resources added 0.9%.
With no major data coming out of Europe on Wednesday, the focus was on the Fed minutes, due at 1800 GMT, which are expected to reinforce a dovish stance.
Meanwhile, the U.S. Labour Department said U.S. employers added far fewer jobs than originally reported in the year through March, underscoring growing concerns about the health of the jobs market.
A deteriorating labour market will allow the Fed to highlight both sides of the dual mandate and investors should expect the Federal Reserve to prepare markets for a cut at the September meeting, according to Jeffrey Roach, Chief Economist for LPL Financial.
Investors were also treading carefully ahead of the Jackson Hole symposium in Wyoming on Friday, where Fed Chair Jerome Powell’s speech will be in focus.
Among individual stocks, healthcare firm Demant advanced 2% after Morgan Stanley upgraded its rating on the stock to “overweight” from “underweight”.
Alcon declined 3% after the Swiss eye care group reported a smaller-than-expected increase in second-quarter sales.
Grifols added around 3% after Bloomberg News reported that Brookfield had asked banks to backstop up to $10.6 billion of debt for a potential take-private deal for the Spanish pharmaceutical company.
Moncler gained 2% after Bernstein upgraded the Italian luxury group to “outperform” from “market-perform”.
On a medium-term outlook for European stocks, Aaron Barnfather, portfolio manager at Lazard Asset Management said Europe has become more shareholder-friendly due to the significant amount of buybacks taking place.
That is a significant opportunity that international investors haven’t started to focus on yet, he added.
