European shares climb on Fed rate-cut hopes, Ukraine peace progress; UK budget awaited

European shares inched higher on Wednesday, supported by mounting expectations of US rate cuts and signs of movement in Ukraine peace talks, while investors waited for the UK’s budget announcement.

The pan-European STOXX 600 rose 0.4% to 570.25 points by 0807 GMT, after posting its strongest daily gain in two weeks on Tuesday.

Major regional indexes were also firmer, with Germany’s and France’s both up 0.5%.

London’s FTSE 100 added 0.2% ahead of the UK’s autumn budget, where Finance Minister Rachel Reeves is expected to outline tens of billions of pounds in tax increases.

European markets drew from upbeat investor sentiment globally as expectations for another US Federal Reserve rate cut in December grew, following soft economic data on Tuesday.

Progress on a Russia-Ukraine peace deal also buoyed sentiment after Ukrainian President Volodymyr Zelenskiy signalled readiness to push forward a US-backed framework to end the war.

Still, defence stocks were higher on the day, with the broader index up 0.8%.

Among individual stocks, Germany’s Puma gained 1.9%, after US peer Urban Outfitters reported third-quarter revenue above estimates.