EUROPE’S Stoxx 600 was muted on Wednesday as investors awaited the US Federal Reserve’s rate decision later in the day, while parsing through a raft of corporate earnings.
The continent-wide Stoxx 600 index closed 0.36 per cent lower at 575.40 points after hitting an intraday record high. Most regional bourses ended higher with UK’s FTSE 100 and Spain’s IBEX 35 hitting record highs.
The Fed is widely expected to deliver a 25-basis-points interest rate cut at its meeting, but focus will remain on Chair Jerome Powell’s commentary, which could set the tone for global markets this week.
In Europe, earnings took centre stage, after Tuesday’s forecasts showed a slightly improved outlook for corporate health.
Banks gained 1.4%, among the biggest boosts to the index. Spain’s Santander gained 4.3% after third-quarter net profit beat forecasts.
Deutsche Bank rose 5% after posting an increase in third-quarter profit, while UBS fell despite a surge in net profit for the same period.
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Healthcare stocks added 0.6 per cent. Drugmaker GSK rose 6.6 per cent after raising its 2025 sales and earnings expectations. Straumann advanced 7.6 per cent after the dental implant maker reported a rise in third-quarter organic sales.
Miners and oil majors rose 1.8 per cent and 1.3 per cent respectively, tracking sharp rises in prices of gold, copper and oil.
“European earnings entered this season with a very low bar. We are seeing beats come through, most notably from banks, but that’s not yet sufficient to move the needle to justify overall European equity optimism at this juncture,” said Laura Cooper, head of macro credit at Nuveen.
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The telecom sector fell 2 per cent after Telenor’s lacklustre results pushed it 6 per cent lower and Nokia eased 4.3 per cent after Tuesday’s over 20 per cent jump.
Other catalysts include a meeting between US President Donald Trump and China’s Xi Jinping, and the European Central Bank’s policy meeting, both on Thursday.
“Medium-term inflation is moving towards 2 per cent… the ECB is in a happy place and can afford to wait and watch,” said analysts at Jefferies.
Among others, Mercedes’ 4.4 per cent gain after the German carmaker reported stronger-than-expected margins at its core autos business, boosted auto stocks.
Consumer discretionary companies dragged down by Adidas’ 10.4 per cent decline after its group sales dipped 5 per cent in North America in the third quarter.
Temenos and Next topped the Stoxx 600 with a 19.7 per cent and 8.8 per cent gain respectively, after raising their forecast for annual earnings.
Earnings from US Big Tech companies Microsoft, Alphabet and Meta Platforms will be scrutinised as stretched tech valuations come into question, especially after Nvidia topped US$5 trillion in market valuation. REUTERS
