European markets close higher as traders await Fed update
European stocks closed higher on Wednesday as tensions eased over embattled Chinese property developer Evergrande and global investors awaited the outcome of the latest meeting of the U.S. Federal Reserve.
The pan-European Stoxx 600 index provisionally closed up 1%, with banks leading the gains to rise 3.1% as most sectors and major bourses ended the session in positive territory.
Among the top performers in the index was Entain, its share price up another 5.1%, having already climbed 18% in Tuesday’s session after the gambling firm received a more than $20 billion takeover proposal from U.S.-based DraftKings.
At the opposite end of the benchmark, German IT firm Bechtle was the worst performer, down 7%.
Top of the agenda for investors on Wednesday is the conclusion of the U.S. Federal Reserve’s highly anticipated September meeting with investors looking out for any indications about the Fed’s tapering of its easy monetary policy.
The Fed will release a policy statement with economic and interest rate forecasts, then Chairman Jerome Powell is expected to speak to the media at 2:30 p.m. ET. Powell has said previously that tapering could occur this year, but investors are waiting for more details, particularly after mixed economic data released since Powell’s last comments.
Evergrande developments
European markets saw a solid rebound on Tuesday after a nervous start to the week, largely caused by investor fears surrounding embattled property developer China Evergrande Group and concerns about the contagion risk for the wider Chinese and global economy.
Investor sentiment may have been soothed on Wednesday after Evergrande unit Hengda announced it will make a coupon payment on its domestic bonds on Thursday. Still, questions remain over whether the interest on Evergrande’s offshore U.S.-dollar denominated bond — also due Thursday — will be made.
On Wall Street, U.S. stocks jumped ahead of the Fed’s decision on monetary policy as stocks tried to snap out of their September slump.
Back in Europe, fresh data out Wednesday showed euro zone consumer confidence rising to 1.3 points in September versus August to -4.0, better than the -5.8 expected by economists.
