Europe open: Shares open higher as investors eye central bank meetings
European shares were higher at the open on Tuesday as investors turned their attention to the US Federal Reserve's two-day policy meeting for an indication on future rate rises.
The pan-European Stoxx 600 was up 0.87% in early deals with all major bourses higher. Traders are expecting the US central bank to lift rates by 75 basis points for the third time in a row on Wednesday as it looks to stymie soaring inflation.
“US markets also got off to a cautious start yesterday, coming off their worst week since June, they retested their 2-month lows of last week without breaking below them, before closing higher on the day,” said CMC Markets analyst Michael Hewson.
“Yesterday’s late rebound in the US looks set to translate into a positive start for European markets later this morning, however whether that can hold is likely to depend on the events of the next few days.”
“The last few days has seen the market narrative start to shift quite markedly from optimism over some form of Fed pivot, to increasing concern over a hard landing for the global, as well as the US economy.”
In the UK, the Bank of England is expected to decide on another 0.5% rate hike when policymakers meet later this week, although Hargreaves Lansdown analyst Susannah Streeter said speculation was growing that they could “plump for a 0.75% hike given inflation looks set to head back up to double digits".
In equity news, shares in Swiss biotech supplier Bachem Holding gained after the company signed two new peptide contracts.
Holiday giant TUI rose as it said winter bookings were at 78% of pre-Covid pandemic levels, and that it still expects to swing to a profit this year. British Airways and Iberia parent IAG and budget airlines Wizz and easyJet all flew higher on the news.
Shares in UK media group Future plunged almost 14% after a Sky News report that chief executive Zillah Byng-Thorne has informed the company's chairman that she plans to retire in the next 18 months.
Reporting by Frank Prenesti at Sharecast.com