Europe open: Stocks track gains on Wall Street ahead of Fed
European equities were heading higher in early trading, tracking gains overnight on Wall Street, 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 0903 BST the benchmark Stoxx 600 was higher by 0.48% to 390.63, alongside gains of 0.42% to 12,818.24 for the German Dax and a push higher to 5,300.54 for the Cac-40 which was up by 0.72%.
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."
Still on the economic calendar for Wednesday were the latest euro area industrial production figures for the month of April and data on employment in the single currency bloc during the first quarter.
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 is 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 are lower after French lenders BNP Paribas and Societe Generale sold stock in the stock exchange operator at €45 per share.