European stocks higher ahead of ECB meeting

by Jonathan Adams
ECB policy

The pan-European Stoxx 600 was 0.5% higher, with all major bourses and the majority of sectors in the green

European stocks were higher Wednesday, with investors in the region looking ahead to the next meeting of the ECB.

The pan-European Stoxx 600 was 0.5% higher by 10:20 a.m. in London, with all major bourses and the majority of sectors in the green. Tech stocks led gains, up 1.6%, while banks dropped 0.6%.

Zara owner Inditex climbed to the top of the benchmark, up 4.3%, after reporting 7% sales growth in the first quarter. Sales reached €8.2 billion ($8.9 billion) in the three months to April, the firm said Wednesday, broadly in line with expectations, as per an LSEG poll.

Euro zone business activity grew for the third successive month in May, final estimates of the region’s composite PMI showed on Wednesday. Growth in the services and manufacturing sectors was steady in Germany, Spain and Italy, but slid marginally in France over the period.

Corresponding data for the U.K. showed business activity also rose in May, but at a slower pace than in April.

The European Central Bank is widely expected to cut interest rates for the first time since 2019 when policymakers meet on Thursday, but investors will watch closely to see whether a slightly higher-than-expected euro zone inflation figure released last Friday will affect the central bank’s decision-making.

In other news, Asia-Pacific markets were mixed overnight as investors evaluated India’s election results after PM Narendra Modi’s Bharatiya Janata Party fell short of an outright majority in the lower house of parliament.

Nevertheless, Modi is set for a third term in power after the BJP-led National Democratic Alliance (NDA) secured 294 seats, more than the 272 required for the coalition to form the government.

U.S. stock futures were near flat Tuesday night as investors geared up for private payroll data, with economists polled by Dow Jones anticipating the data will show private employers added 175,000 jobs in May.

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