Europe stocks on Wednesday advanced as a signal of easing tensions between the U.S. and China helped bid equities higher ahead of a critical central bank decision.
The Stoxx Europe 600 SXXP, +0.54% rose 0.66% to 388.98.
Banks SX7E, +0.98% and insurers advanced, while more defensive names like Veolia VIE, -2.87% , the French waste and waste management company, and Iberdrola IBE, -1.13% , the Spanish utility, lost ground.
The German DAX DAX, +0.65% rose 0.8% to 12366.47, the French CAC 40 PX1, +0.25% rose 0.42% to 5616.65 and the U.K. FTSE 100 UKX, +0.78% jumped 1.02% to 7341.94.
U.S. stock futures ES00, +0.01% rose after a 73-point advance for the Dow industrials DJIA, +0.28% on Tuesday.
China on Wednesday announced plans to exempt 16 categories of products from the first round of tariffs. Talks between the U.S. and China are scheduled to resume at a high level in October.
The European Central Bank on Thursday is meeting with expectations of a package of easing measures to be announced.
“Although this week’s ECB meeting is shaping up as one of the most unpredictable in recent years, what’s in question is not whether policy will be eased but the precise combination of measures which will find support to get through the Governing Council,” said Marchel Alexandrovich of Jefferies. “The bar for further ECB easing has been lowered substantially in recent months and it would be a case of severe miscommunication if at this point, even in the face of small downward forecasts changes, the ECB failed to amend policy.”
Of companies in the spotlight, the London Stock Exchange LSE, +6.26% shot up 9% to 7448 pence after the Hong Kong Exchanges & Clearing 388, +0.33% launched a surprise £29.6 billion, or 8,361 pence a share bid. The Hong Kong exchange already owns The London Metal Exchange.
The LSE didn’t have an immediate comment on the bid.
Inditex ITX, -2.41% fell 2% as the Zara and Massimo Dutti owner reported a weaker-than-forecast profit alongside first-half same-store sales of 5% and a forecast of full-year same-store sales between 4% and 6%.
“The main issue will be the focus on why gross margin has been weaker with no large FX moves and a strong like-for-like sales and why there is not more leverage on a solid LFL performance. This may again bring into question whether Inditex can grow both LFL and gross margin at the same time,” said analysts at Citi.