The pan-European STOXX 600 index was 0.2% higher, with all regional indexes trading in the green
European shares opened higher on Wednesday, boosted by the tech and basic resources sectors, while investors awaited a key U.S. inflation number for clues on the Fed’s interest rate decision next week.
The pan-European STOXX 600 index was 0.2% higher. All regional indexes were trading in the green.
Heavy-weight ASML Holding’s 3.8% gain caused the technology sector to gain 1.4%.
Basic resources also provided support, adding 1.2%, as copper prices advanced on a weaker U.S. dollar.
Britain’s benchmark FTSE 100 edged up 0.4% after estimates of GDP data showed the UK’s economic output showed no change in month-on-month terms in July.
With only a handful of economic data out of Europe, investors are focused on U.S. consumer price figures set to arrive at 1230 GMT.
Traders anticipate the Federal Reserve will reduce interest rates at its meeting next week. However, there is some uncertainty regarding the extent of the rate cut. There is a 33% chance of a 50 bp cut.
Global investors approached the markets with caution following the first debate between U.S. presidential candidates Kamala Harris and Donald Trump, which took place overnight. The debate lacked specific details, but betting markets shifted in favour of Harris after the event.
Investors are trying to grapple with an higher degree of uncertainty. We are going to see greater bouts of volatility heading into that November election until it becomes clear on the policy front, according to Laura Cooper, global investment strategist at Nuveen.
Markets also have on their radar, comments from ECB board member Elizabeth McCaul and the central bank’s supervisor Claudia Buch due later in the day.
The ECB that meets in less than 24 hours is expected to lower interest rates by 25 bps.
Markets are going to take cues from Christine Lagarde’s press conference where she will want to keep that flexibility open instead having a predetermined target level, Cooper added.
