European Stocks Close On Firm Note Ahead Of Fed Policy Announcement

(RTTNews) - European stocks closed on a strong note on Wednesday, snapping a long losing streak, as investors, sort of factoring in a possible sharp rate hike by the Federal Reserve, indulged in some bargain hunting at several counters from across various sectors.

The markets also digested the the European Central Bank's proposal to create a new tool to tackle the risk of fragmentation across the common currency bloc in order to alleviate fears of a debt crisis. The ECB announced this move after an unscheduled monetary policy meeting following the surge in bond yields in the region.

The Bank of England, which is scheduled to announce its policy on Thursday, is widely expected to announce yet another rate hike - the fifth in succession - to combat soaring inflation.

The pan European Stoxx 600 climbed 1.42%. The U.K.'s FTSE 100 surged up 1.2%, Germany's DAX gained 1.36% and France's CAC 40 advanced 1.35%, while Switzerland's SMI gained 0.79%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Ireland, Netherlands, Norway, Portugal, Russia, Spain, Sweden and Turkey closed with sharp to moderate gains.

Poland edged up marginally, while Iceland ended weak.

In the UK market, Ocado Group, Whitbread, Scottish Mortgage, Pershing Square Holdings and Coca-Cola HBC climbed 5 to 7%.

ICP, Smurfit Kappa Group, Kingfisher, B&M European Value Retail, Schrodders, Fresnillo, RS Group, Dechra Pharmaceuticals, Ashtead Group, IAG, Aveva Group, Aviva and Sainsbury (J) gained 3 to 4.5%.

Airtel Africa drifted down nearly 4%. BP, Shell and BAE Systems lost 1.4 to 1.7%.

In the French market, Valeo, Faurecia, Renault, Accor, WorldLine, Sodexo, STMicroElectronics, Kering, Societe Generale and AXA gained 3 to 5%.

Dassault Systemes, Bouygues, Michelin, Safran, Engie, Legran, CapGemini, Credit Agricole, Air France-KLM, ArcelorMittal, Vinci and Veolia moved up 2 to 3%.

Atos ended nearly 5% down, extending previous session's sharp fall.

In the German market, Qiagen, Continental, Zalando, HelloFresh, Munich RE, Puma, Allianz, Infineon Technologies, Deutsche Bank, Deutsche Post, HeidelbergCement, MTU Aero Engines, BMW, Volkswagen, Daimler and Symrise gained 1.8 to 4%.

Siemens Healthineers tumbled more than 6%. Deutsche Wohnen shed about 1.4%.

Shares of Swiss specialty chemicals company Clariant AG gained about 0.5%. The firm posted a rise in EBITDA for the first quarter, supported by higher sales, cost savings and pricing measures.

Swedish medical equipment maker Getinge plummeted 17.5% after lowering its FY22 sales forecast.

Swedish clothing company H&M declined 6.5% despite the company reporting a 12% rise in Q2 sales.

In European economic news, the euro area trade deficit increased sharply to a record high in April driven by high energy prices, data from Eurostat showed.

The trade gap widened to EUR 31.7 billion from EUR 17.8 billion in March. This was the biggest shortfall since 1999.

Exports logged a monthly growth of 1.5%, following March's 1% increase. At the same time, growth in imports accelerated to 7.1% from 3.2%. On an unadjusted basis, the trade balance showed a deficit of EUR 32.4 billion compared to a surplus of EUR 14.9 billion in the previous year.

Eurozone industrial production recovered in April but the pace of growth remained weak, data from Eurostat showed. The data said industrial output rose 0.4% month-on-month in April, reversing a 1.4% fall in March, which was revised down from a 1.8% decline estimated initially.

The monthly growth was just below the 0.5% increase expected by economists.

France's consumer price inflation accelerated as initially estimated in May amid soaring energy prices, final data from the statistical office Insee showed.

The consumer price index rose 5.2% year-over-year in May, faster than the 4.8% rise in April. The rate was in line with the flash data published on May 31.

Switzerland's producer and import prices increased 6.9% year-on-year in May, data from the Federal Statistical Office showed. Producer and import prices increased 6.7% a month earlier.

Switzerland's government downgraded the economic growth forecast for this year as experts assessed that the effects of the war in Ukraine could turn out to be stronger than previously expected.

In the Summer forecast, the State Secretariat for Economic Affairs said the economy is set to grow 2.6% this year instead of 2.8% projected in March. Likewise, the projection for next year was downgraded to 1.9% from 2%.