European Stocks Close Higher Despite Cautious Trade Ahead Of Fed Policy

European stocks closed slightly up after a cautious session on Wednesday as investors looked ahead to the U.S. Federal Reserve’s monetary policy announcement.

The Fed is widely expected to announce plans to begin gradually scaling back its $120 billion in monthly bond purchases by mid-November or December. The language of the accompanying statement is expected to provide clues about the outlook for interest rates.

Traders also awaited the post-meeting press conference by Fed Chair Jerome Powell.

Markets also looked ahead to the Bank of England’s policy announcement, due on Thursday.

The pan European Stoxx 600 climbed 0.35%. The U.K.’s FTSE 100 declined 0.36%, Germany’s DAX edged up 0.03% and France’s CAC 40 gained 0.34%. Switzerland’s SMI surged up 0.37%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Finland, Greece, Ireland, Netherlands, Norway, Sweden and Turkey closed higher.

Poland, Portugal, Russia and Spain drifted lower, while Denmark and Iceland ended flat.

In the UK market, Pearson, Fresnillo, IAG, Smith & Nephew, WPP, Royal Mail, Anglo American Plc, Johnson Matthey, CRH, Burberry Group, BAE Systems, Antofagasta, Associated British Foods and Hargreaves Lansdown gained 1 to 3%.

Darktrace shares ended more than 5% down. Coca-Cola, Next, BP, Informa, B&M European Value Retail, Royal Dutch Shell, JD Sports Fashion, Sainsbury (J), Vodafone Group, Reckitt Benckiser, M&G and Lloyds Banking Group shed 1 to 3.5%.

In the French market, Worldline SA shares climbed more than 4%. Unibail Rodamco, Valeo, Dassault Systemes, Essilor, Hermes International, Schneider Electric, Air Liquide and STMicroElectronics gained 1.3 to 2.5%.

Technip, Sodexo, Airbus, Safran, Vinci, Bouygues and Publicis Group ended with sharp to moderate losses.

In Germany, HelloFresh zoomed nearly 7%, extending recent gains. BME gained more than 3% after reporting higher quarterly profit.

Deutsche Wohnen, Continental, Adidas, Puma, Deutsche Telekom, Merck, Infineon Technologies, Henkel, HeidelbergCement, Deutsche Bank and Deutsche Post gained 1 to 3.5%.

Airline Lufthansa surged nearly 7% as it returned to profit for the first time since the coronavirus crisis. Software firm TeamViewer gained about 11% after confirming its outlook.

Zalando plunged more than 8.5%. Fresenius, Volkswagen, Porsche Automobil and Fresenius Medical Care also declined sharply.

Vestas, the world’s largest maker of wind turbines, plunged sharply after it reported a drop in its profitability margin for the third quarter of 2021 due to supply chain instability and cost inflation of materials.

In economic releases, U.K. house prices grew 9.9% year-on-year in October, following a 10% rise in September, data from Nationwide Building Society showed. Economists had forecast the growth rate to ease to 9.3%.

On a monthly basis, house prices advanced 0.7% after rising 0.2% in September. Prices were expected to climb 0.4%.

The UK service sector registered a sharp growth momentum in October driven by robust new work amid the reopening of the economy and looser international travel restrictions, final survey results from IHS Markit showed.

The headline Chartered Institute of Procurement & Supply services Purchasing Managers’ Index rose to 59.1 in October from 55.4 in September. The flash reading was 58.0.

The euro area unemployment rate dropped marginally in September, falling to a seasonally adjusted 7.4% from 7.5% in the previous month, data from Eurostat showed. The rate came in line with economists’ expectations.