Europe close: Stocks steady, investors' focus shifts to US jobs report

European stocks were mostly higher on Wednesday with market participants apparently taking in their stride the prospect of higher interest rates for longer.

Helping matters, come Wednesday, in his second day of testimony before the US Congress, US Federal Reserve chairman Powell said that the size of the next rate hike had not yet been decided.

The pan-European Stoxx 600 index edged up 0.08% to 460.99, alongside a 0.46% gain for the German Dax to 15,631.87 while Spain's Ibex 35 added 0.58% to 9,466.10.

"Powell has done a good job of waking up markets to the very real risk that rates end up higher for longer in a bid to drive down inflation," said IG senior market analyst Josh Mahony.

"While we have seen stocks stabilise somewhat today, the data-dependant nature of the Fed could mean a 50-basis point hike if inflation fails to head lower next week."

Stock markets had been walloped the day before following hawkish comments from Powell suggesting higher and faster interest rate rises could be on the way.

Against that backdrop, investors' attention was expected to shift to the US non-farm payrolls report due out on 10 March.

In economic news, the eurozone economy stagnated in the final quarter of last year, according to data released on Wednesday by Eurostat.

Growth for the bloc was revised down to 0.0% quarter-on-quarter from a previous estimate of 0.1%. This was down from upwardly-revised 0.4% growth in the third quarter.

Compared with the fourth quarter of 2021, growth was 1.8%, down from a previous estimate of 1.9%.

Separate figures from Eurostat showed that employment grew 0.3% on the quarter in the final quarter of last year.

Elsewhere, German industrial production rose more than expected in January, increasing by 3.5% from the prior month. Economists had been looking for a 1.5% rise.

In another earnings deluge, shares in sportswear manufacturer Adidas shares were up despite the company cutting its dividend after its split with controversial rapper Kanye West.

Shares of Darktrace dipped after the British cybersecurity company lowered guidance for full-year cash flow.

Symrise shares reversed early losses even after the German flavour and fragrance maker said that its 2023 core profit margin would be slightly below market expectations due to higher costs.