European Stocks Close Higher On Fed Rate Cut Hopes

(RTTNews) - European stocks closed broadly higher on Wednesday, thanks largely to gains in the mining sector. The undertone remained firm amid continued optimism about an interest rate cut by the Federal Reserve next month.

The Labor Department today revealed the U.S. economy created 818,000 fewer jobs than originally reported in the twelve-month period ended March 2024.

It is felt that the weaker than expected previously reported job growth may increase pressure on the Fed to lower rates to support the job market.

Investors looked ahead to the minutes from the Federal Reserve's most recent meeting for more clarity about the U.S. central bank's interest rate moves.

The pan European Stoxx 600 ended 0.33% up. The U.K.'s FTSE 100 gained 0.12%, Germany's DAX and France's CAC 40 ended higher by 0.5% and 0.52%, respectively. Switzerland's SMI edged down 0.13%.

Among other markets in Europe, Austria, Belgium, Finland, Greece, Netherlands, Poland, Russia and Spain ended higher.

Denmark, Iceland, Norway, Sweden and Turkiye closed weak, while Portugal ended flat.

In the UK market, JD Sports Fashion rallied 4% and Airtel Africa climbed nearly 3%. Croda International and Diageo gained 2.1% and 2%, respectively.

RightMove, Prudential, Anglo American Plc, Melrose Industries, Vistry Group, IMI, Reckitt Benckiser, Auto Trader Group, Pershing Square Holdings, Rio Tinto, Convatec, Coca-Cola HBC, Marks & Spencer, Persimmon and Experian gained 1 to 1.85%.

Severn Trent ended down nearly 2.5%. Antofagasta, 3i Group, United Utilities, BT Group, Centrica and Barratt Developments lost 1 to 1.7%.

In the German market, Porsche gained about 2.3%. BASF, Adidas, Infineon, Mercedes-Benz, Beiersdorf, Brenntag, BMW, Henkel and Sartorius climbed 1 to 2%.

MTU Aero Engines, Bayer, Deutsche Telekom, Hannover Rueck and Merck closed weak.

In the French market, Pernod Ricard climbed about 3%. Unibail Rodamco gained 2.2%. Renault, ArcelorMittal, L'Oreal, Veolia, Societe Generale, Hermes International and Legrand gained 1 to 1.7%.

Teleperformance, Carrefour, Danone, Edenred and STMicroElectronics closed weak.

UK government borrowing in July exceeded the official estimate and also hit the highest for the month since 2021 due to the increase in public spending, data from the Office for National Statistics showed. Public sector net borrowing increased GBP 1.8 billion from the previous year to GBP 3.1 billion in July. This was the highest July borrowing since 2021.