European stocks modestly higher as U.S. rally lifts global sentiment
The pan-European Stoxx 600 added 0.4% in early trade, with basic resources climbing 1% to lead gains as all sectors and major bourses entered positive territory.
The higher trade for European markets comes after choppy trade on Tuesday as the relief rally seen in the previous two sessions lost some momentum.
U.S. stocks rallied Tuesday, however, with the market resuming a bounce from last month’s lows, as traders bet on strong corporate earnings reports and wagered that markets have found a bottom.
Shares in the Asia-Pacific jumped Wednesday after the sharp bounce in U.S. stocks overnight.
Besides the positive lead from Wall Street, there were also reports that Russia and Ukraine are nearing a deal that would end the blockade on grain exports, and that Nord Stream 1 is likely to restart gas exports on schedule after maintenance is completed.
Back in Europe, the European Central Bank’s policy meeting in Frankfurt on Thursday is at the forefront of investors’ minds, with policymakers having given advance notice of a first hike in 11 years. Still, this comes against a backdrop of slowing growth, the war in Ukraine and threats to energy supplies.
U.K. inflation hit yet another new 40-year high in June as food and energy prices continued to soar, escalating the country’s historic cost-of-living crisis.
The consumer price index rose 9.4% annually, according to estimates out Wednesday, slightly above a consensus forecast among economists polled by Reuters and up from 9.1% in May.
Earnings came from AkzoNobel and ASML before the bell.
Uniper was the biggest climber in early trade, the German energy giant’s shares adding more than 6% amid bailout talks with the government.
At the bottom of the Stoxx 600, Royal Mail shares fell more than 5% after a downbeat trading update.
