FRANKFURT: 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 0.1 percent lower 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 percent, among the biggest boosts to the index. Spain’s Santander gained 4.3 percent after third-quarter net profit beat forecasts.
Deutsche Bank rose 5 percent after posting an increase in third-quarter profit, while UBS fell despite a surge in net profit for the same period.
Healthcare stocks added 0.6 percent. Drugmaker GSK rose 6.6 percent after raising its 2025 sales and earnings expectations. Straumann advanced 7.6 percent after the dental implant maker reported a rise in third-quarter organic sales.
Miners and oil majors rose 1.8 percent and 1.3 percent 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. The telecom sector fell 2 percent after Telenor’s lacklustre results pushed it 6 percent lower and Nokia eased 4.3 percent after Tuesday’s over 20 percent 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 percent... the ECB is in a happy place and can afford to wait and watch,” said analysts at Jefferies.
Among others, Mercedes’ 4.4 percent gain after the German carmaker reported stronger-than-expected margins at its core autos business, boosted auto stocks.
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