Europe open: Shares edge ahead after US CPI as investors await Fed

European stocks edged ahead at the open on Wednesday as investors digested US inflation and UK GDP data while awaiting a rate decision from the US Federal Reserve later in the day.

The pan-European Stoxx 600 index was up 0.09% at 473.35 in early deals with all major bourses higher.

The Fed is expected to hold its benchmark overnight borrowing rate in a range of 5.25 - 5.5%, but investors will be looking at Fed Chair Jerome Powell’s commentary for any indications on when rates might start falling.

In Britain, the economy shrank by 0.3% following 0.2% growth in September and versus expectations for a flat performance. Over the last quarter, GDP was unchanged.

"The UK is still mired deep in stagnation territory and a fast rebound looks unlikely, particularly given that interest rates are set to be kept on hold tomorrow, prolonging the pain for borrowers,” said Hargreaves Lansdown analyst Susannah Streeter.

"However, it does increase the likelihood that the Bank of England might cut rates earlier than forecast, although it’s still not likely until the second half of next year, given that wage increases, although slowing, are still strong."

Rate decisions are due on Thursday from the Bank of England and the European Central Bank.

In equity news, Entain shares were higher after chief executive officer Jette Nygaard-Andersen has resigned from her position with immediate effect. The company said it had appointed Stella David, a non-executive director, as interim CEO until a permanent replacement is selected.

B&M European Value Retail fell after SSA investments sold 27.8m shares in the discount retailer in a placing raising aggregate gross sale proceeds of £162.1m.

BAE Systems was higher after the defence manufacturer won a contract worth up to $8.8bn with the US Army to continue as the operating contractor of the Holston Army Ammunition Plant (HSAAP) with a base period of 10 years.

Reporting by Frank Prenesti for Sharecast.com