Europe midday: November rally resumes as markets await UK Budget

European stocks rose on Wednesday with the FTSE 100 the only major index not making gains, though upside was limited as investors digested last night's FOMC minutes and Nvidia earnings and showed caution ahead of the UK's Autumn Budget.

The Stoxx 600 was up 0.4% by lunchtime, with the Dax, Cac 40, FTSE MIB and Ibex 35 all rising between 0.4% and 0.5%, offset by a flat reading on the FTSE 100.

Joshua Mahony from Scope Markets said markets resumed a "risk-on" approach that has dominated November so far, with the Stoxx 600 having now risen 5.5% since the start of the month.

Traders will be still digesting the minutes from the latest Federal Open Market Committee meeting, released last night, in which the central bank discussed leaving policy "at a restrictive stance for some time" until inflation moves down sustainably to the 2% target.

"With markets heavily focused on the transition from monetary tightening to the timing of the first 2024 rate cut, yesterday’s FOMC minutes did little to dampen sentiment despite their view that rates would remain restrictive for some time yet," said Mahony.

With very little economic data scheduled in Europe, eyes were firmly on UK chancellor Jeremy Hunt who was set to deliver the government's Autumn Statement at 1230 GMT. He is expected to unveil tax cuts to win back voters for the Tories who have lost a lot of support over the past year.

"With rising interest rates and treasury yields having made government borrowing significantly more expensive, markets will want to see the Chancellor lay out plans to cover the cost of any new spending without adding to the fast-growing debt burden," Mahony said.

Meanwhile, results from Nvidia after the closing bell on Wall Street were making headlines after the market gave a muted reaction to forecast-smashing figures. The company beat quarterly revenue forecasts by a staggering $2bn, but fell short of estimates with its current-quarter targets, causing shares to fall in after-hours trading.

Thyssenkrupp and Sage jumps

Shares in Thyssenkrupp surged in Frankfurt on Wednesday despite the German engineering giant taking a huge €2.1bn write-down on the value of its steel division. The company reported a net loss of €2.0bn in its fiscal year ending 30 September, compared to a net profit of €1.2bn the year before, as a result of the impairment of Steel Europe. But shares were up nearly 7% as it booked its first ever positive annual free cash flow before mergers and acquisitions.

Sage Group was a high riser in London, jumping 14% after the enterprise software group reported full-year underlying recurring revenue growth of 12% and proposed a final dividend increase of 5% and a share buyback programme of up to £350m.

Heading the other way was home improvement retail conglomerate Kingfisher which cut its profit guidance for the second time in two months owing to continued market weakness in France, causing shares to drop 6%. The company, which owns B&Q and Screwfix in the UK along with a host of other DIY brands across Europe, said adjusted pre-tax profit for the year ending January 2024 will now come in at around £560m, compared with £758m the year before.

Swiss luxury giant Richemont was performing well after JP Morgan named the company as "the only name we would still chase" in the European luxury goods sector "which stands, in our view, as one of the quality names in the space and at one of the most attractive valuations".