Europe midday: Tech bounce continues ahead of Fed

Gains in technology shares propelled the main European equity gauges higher even as investors waited on Wednesday evening's US central bank policy announcement, with analysts and traders split on whether or not the Federal Reserve would sound a 'dovish' note.

Although futures markets had fully priced-in a 25 basis point hike in the Fed's main rate, the odds assigned to another increase by the end of 2017 stood at just 50%, contrary to what policymakers on the Potomac had been signalling.

At 1218 BST the benchmark Stoxx 600 was higher by 0.56% to 390.92, alongside gains of 0.97% to 12,889.99 for the German Dax and a push higher to 5,297.70 for the Cac-40 which was up by 0.68%.

In parallel, the Stoxx 600's subindex of technology companies was advancing 1.23% to 432.33 points.

Comenting on the outlook for the Fed meeting, Michael van Dulken and Henry Croft at Accendo Markets told clients: "Greater onus, however, will be on outlook and whether we get hints about another two hikes this year, vindicating last December’s 4-hike forecast. Any mention of timing on trimming its QE-bloated balance sheet would also be welcome.

"With early 2016’s disastrous forecasting still fresh in markets’ memory, any move away from prior forecasts might see USD confidence drop and Chair Janet Yellen’s press conference (7:30pm) become a heated affair, given markets’ dislike of uncertainty and surprises."

Euro area industrial production grew by 0.5% month-on-month, while the year-on-year rate of growth slowed from 2.2% for March to 1.4% in April, according to Eurostat (consensus: 1.3%).

Meanwhile, other data revealed that employment in the single currency bloc increased at a 0.4% quarter-on-quarter clip over the first three months of 2017.

Later in the day, investors were waiting on US consumer price and retail sales figures for the month of May. Some analysts believed those reports might influence the Fed's decision-making should they reveal significant unexpected weakness.

Capital markets were in rude health judging by the news-flow regarding M&A activity and upcoming IPO's.

Sweden's Hexagon rocketed after the Journal disclosed the company was in talks about a potential sale.

Stock in Air Berlin was lower after the chief of Germany's anti-trust watchdog rejected government aid for the airline in an interview with Die Welt.

Another German-listed firm, restaurant owner Vapianom set a price range of between €21 and €27 per share for its upcoming listing on the Frankfurt bourse.

Belgium's Balta set a price of €13.25 per share for its own upcoming listing.

Shares in Euronext were down after French lenders BNP Paribas and Societe Generale sold stock in the bourse operator at €45 per share.