LONDON – European stocks ended higher on Wednesday, rebounding after ending a long run of gains on Tuesday.
The pan-European Stoxx 600 index temporarily closed 0.32% higher on Wednesday, with almost all sectors rising. Automobile stocks rose 1.45%, mining stocks rose 1.02% and telecommunications stocks fell 0.24%.
The region’s benchmark index ended lower on Tuesday, ending a strong rally that began with the global sell-off from August 1 to 5.
Stoxx 600 Index.
UK public sector net borrowing rose to 3.1 billion pounds ($4.037 billion) in July, an increase of 1.8 billion pounds on the previous year, the Office for National Statistics said. declare Wednesday. The figure was above the consensus forecast of £2.5bn, while borrowing in the first four months of the year was £4.7bn higher than the Independent Office for Budget Responsibility’s March forecast.
Alex Kerr, U.K. economist at Capital Economics, said: “The bad news on fiscal conditions continues to come in the near term.” Kerr added that even if spending does not continue to exceed expectations, new Tax increases are also expected to appear in the Labor government’s first budget on October 30.
With the exception of Thursday’s Eurozone PMI data, the rest of the week was quiet on the European data front.
The focus turns to the U.S. domestically, with Federal Reserve Chairman Jerome Powell speaking at a closely watched central bank symposium in Jackson Hole on Friday and ahead of the release of minutes from the Fed’s meeting on Wednesday.
The market has already fully digested the impact of the Federal Reserve’s interest rate cut in September, but whether the rate cut will be 25 basis points or 50 basis points, market sentiment is even more unstable. according to CME Group’s Fed Watch tool, the probability of the former is 67.5% and the probability of the latter is 32.5%.
Powell is not expected to provide firm guidance on the path forward, but his comments will be interpreted as a more hawkish or dovish tone.
His comments came as U.S. retail sales and weekly jobless claims exceeded expectations in July, sparking debate about the health of the U.S. economy.
“It’s not that far away from Goldilocks, and if you think about it, we have inflation continuing to come down, economic growth is still good — there are signs of weakness, but still growing — earnings season is pretty good, and the Fed is very close to starting to cut interest rates,” Charles-Henry Monchau, chief investment officer of Syz Bank, told CNBC’s “Squawk Box Europe” program on Wednesday.
“So if you put all of this together, the stock market is still in pretty good shape. There are a lot of risks, but overall the picture is still good,” Munshaw said.
U.S. markets last moved higher on Wednesday. Elsewhere, Asia-Pacific markets mostly pulled back after Wall Street fell on Tuesday.
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