Europe midday: Shares push on ahead of US CPI; FDA pause hits Merck

European shares pushed further ahead on Wednesday as investors awaited key US inflation data for a sign on future interest rate moves.

The pan-European Stoxx 600 index was up 0.28% at 1130 GMT with major bourses higher. Asian shares had closed mixed and Wall Street finished in cautious mood.

Investors will also look at minutes of the Federal Reserve's last meeting in March, when it raised rates by 25 basis points.

“Markets are super-sensitive to any indication that the Fed will stay aggressive in its inflation fighting stance, and the worry is that core inflation, which excludes volatile food and energy costs, may be proving harder to bring down more quickly, which could harden policymakers’ resolve,” said Hargreaves Lansdown analyst Susannah Streeter.

“Another 0.25% hike is already expected in May, and a stronger than expected core inflation reading, could tip the balance in forecasts towards yet another rate rise in June, which may set off a fresh round of equity selling, particularly for companies in the sensitive tech sector. But there are still hopes that the pause button may still be pressed, if policymakers assess that the lag effect of rate rises will do the job and bring down the price spiral.”

In equity news, shares in Volvo surged to the top of the Stoxx as the truck maker reported record first-quarter profit on higher revenue and margins.

Shares in Germany's Merck slumped after the US Food and Drug Administration had paused the initiation of new patients on its multiple sclerosis evobrutinib drug.

Investors are awaiting first-quarter earnings from French luxury goods group LVMH after markets close to see how demand from China has fared after Covid-19 restrictions were lifted in that country late last year.

Reporting by Frank Prenesti for Sharecast.com