European stocks closed higher on Wednesday, with investors building up some positions ahead of elections in the U.K., and France, scheduled to take place on Thursday and Sunday, respectively.
Investors digested the latest batch of economic data from Europe and the U.S., as well as some corporate news from the region.
Dovish comments from Federal Reserve Chair Jerome Powell aided sentiment. On Tuesday, Powell acknowledged progress in disinflation but added that officials need more confidence before cutting interest rates.
On the political front, over 200 candidates have reportedly withdrawn from France’s runoff election to block far-right, as Macron and left-wing coalition unite.
Marine Le Pen said that the National Rally would still try and form a government even if they failed to achieve an overall majority.
Elsewhere in the U.K., the Labour Party is set to grab 484 out of the total 650 seats in the Parliament, a pre-poll company Survation projected.
The pan European Stoxx 600 climbed 0.74%. The U.K.’s FTSE 100 gained 0.61%, while Germany’s DAX and France’s CAC 40 jumped 1.16% and 1.24%, respectively. Switzerland’s SMI edged up 0.06%.
Among other markets in Europe, Austria, Belgium, Finland, Greece, Netherlands, Poland, Portugal, Spain, Sweden and Turkiye ended notably higher.
Iceland and Norway edged up marginally, while Denmark and Russia closed weak.
In the UK market, International Consolidated Airlines Group rallied 5.51%. EasyJet gained 4.2%, and Fresnillo climbed 4.1%.
Barclays Group, Burberry Group, Antofagasta, Croda International, Vistry Group, Rio Tinto, Mondi, United Utilities, Howden Joinery, Rentokil Initial, Severn Trent, Schrodders, Glencore, Persimmon, Entain, Prudential and Rolls-Royce Holdings gained 2 to 3.5%.
JD Sports Fashion dropped 4%. after Barclays downgraded the stock to “underweight” from “equalweight”.
3i Group, Hikma Pharmaceuticals, B&M European Value Retail, Shell and Reckitt Benckiser ended moderately lower.
In the German market, Rheinmetall, Sartorius, Siemens Energy, Deutsche Bank, Zalando, Deutsche Post, Continental, MTU Aero Engines and HeidelbergCement climbed 2 to 5%.
Vonovia, RWE, Infineon, Bayer, Porsche, SAP, BASF, Siemens, Mercedes-Benz, and E.ON also posted notable gains.
Munich RE, Daimler Truck Holding, Hannover Rueck, Henkel, Qiagen, Beiersdorf and Siemens Healthineers closed lower by 0.5 to 1.4%.
In the French market, Teleperformance surged more than 5%. Saint-Gobain, Airbus Group, Pernod Ricard, STMicroElectronics, Accor, Veolia, BNP Paribas, Thales, Edenred, Credit Agricole, Dassault Systemes, Societe Generale, Schneider Electric and AXA gained 2 to 3.3%.
In economic news, euro area private sector expanded at the end of the second quarter but the growth lost momentum due to the softening demand and weaker sales, final results of the HCOB Purchasing Managers’ survey, compiled by S&P Global, showed.
The composite output index registered 50.9 in June, down from 52.2 in the previous month. The score was slightly above the flash score of 50.8.
Data from Eurostat showed eurozone producer prices continued to decline in May but the pace of decrease softened as the decline in energy prices slowed further.
Producer prices posted an annual fall of 4.2% in May after a 5.7% decrease in April. Prices were expected to grow 4.1%. Excluding energy, producer prices were down 0.4%, following April’s 0.9% decrease.
The UK service sector’s growth moderated further in June to the lowest level in seven months amid softer demand conditions ahead of the upcoming general election, final survey data from S&P Global showed.
The S&P Global Services Purchasing Managers’ Index dropped to 52.1 in June from 52.9 in the previous month. The flash score was 51.2.
Market Analysis
European Stocks Close On Firm Note On Rate Cut Hopes
2024-07-03 16:53:04
