European Shares Gain As Investors Await Fed Decision
European stocks traded higher on Tuesday as a two-day policy meeting of the Federal Reserve gets underway later today, with markets expecting a 25-bps rate hike on Wednesday.
The Fed commentary and dot plot hold the key for future course of dollar and yields.
The pan European STOXX 600 was up 1.4 percent at 446.59 after gaining 1 percent on Monday.
The German DAX climbed 1.5 percent, while France’s CAC 40 index and the U.K.’s FTSE 100 both added around 1.4 percent.
Banks topped the gainers list as fears of a widespread contagion risk eased somewhat after the takeover of Credit Suisse.
Credit Suisse shares were little changed after plunging 55 percent in the previous session. UBS rose nearly 4 percent.
Automakers BMW, Volkswagen and Renault all gained about 2 percent after industry data showed European new passenger car registrations continued to strengthen in February albeit due to the low base of comparison given the semiconductor shortage crisis at the beginning of 2022.
Passenger car sales increased 11.5 percent on a yearly basis to 802,763 units in February. This followed an 11.3 percent rise in January.
Pernod Ricard SA gained half a percent. The French spirits and wines firm said that its American unit has inked a deal to buy a majority stake in Skrewball, a peanut butter flavored whiskey brand.
British home improvement retailer Kingfisher rose over 1 percent despite posting a drop in FY profits and revenue.
Recruitment firm SThree added 1.6 percent after net fees rose in the first quarter of fiscal 2023.
In economic releases, the U.K. budget deficit widened to its highest February level due to the substantial spending on energy support schemes, the Office for National Statistics said.
Public sector net borrowing excluding banks increased by GBP 9.7 billion from the last year to GBP 16.7 billion in February. This was the highest February borrowing since records began in 1993.
The German ZEW survey of economic sentiment for March is awaited later in the day.
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