European stocks logged modest gains Wednesday, helped by advances for energy shares as oil prices were in recovery mode. The results of the Dutch election and the Federal Reserve’s policy meeting also weighed on investors’ minds.
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +0.20% ended 0.4% higher at 375.10, rebounding from a 0.3% loss on Tuesday.
The European oil-and-gas index /zigman2/quotes/210599627/delayed XX:SXEP +1.33% moved up 1.1% as oil prices gained ground after industry group American Petroleum Institute late Tuesday reported a decline in U.S. crude supplies. Oil prices slid earlier on Tuesday after a monthly OPEC report showed an increase in U.S. and Saudi Arabian crude output in an already oversupplied global market
A decline in the dollar /zigman2/quotes/210598269/delayed DXY +0.41% also aided dollar-denominated oil prices. The pullback came before the Federal Reserve policy decision, due at 6 p.m. London time, or 2 p.m. Eastern Time, followed by Yellen’s press conference at 2:30 p.m. Investors have priced in expectations of a rate hike, but will watch to see what Fed Chairwoman Janet Yellen will say about rates moving forward and her assessment of U.S. and global growth.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.5267% bought $1.0638, compared with $1.0605 late Tuesday in New York.
Banks rose in anticipation of the Fed rate increase, with the Stoxx Europe 600 Banks Index /zigman2/quotes/210599339/delayed XX:SX7P -0.21% rising 0.9%. Higher rates mean banks can charge more for their loans, which could help them improve their margins.
Dutch election: Late Wednesday or early Thursday the preliminary results of the general election in the Netherlands will be released, and investors are watching if Geert Wilders’ far-right Party for Freedom will make a strong showing.
If “Wilders is crowned as the winner, even if he does not manage to establish a government, his strong showing could add momentum to the [presidential] campaign of the French far-right candidate, Marine Le Pen,” said Charalambos Pissouros, senior analyst at IronFX, in a note.
A victory for Wilders’s party “may cause the euro to give back more of the gains it posted following the recent ECB meeting, and in combination with a rate hike by the Fed, it could push euro/dollar gradually lower for another test near the key 1.0500 territory,” he said.
The Netherlands’ AEX /zigman2/quotes/210598166/delayed NL:AEX +0.89% closed 0.3% higher at 511.66.
Indexes: Germany’s DAX 30 index /zigman2/quotes/210597999/delayed DX:DAX +0.41% rose 0.2% to 12,009.87, while France’s CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -0.40% ended 0.2% higher at 4,985.48.
Movers: Zodiac Aerospace SA shares tumbled 16% after the maker of aircraft seats late Tuesday warned that full-year operating income would fall 10%. French aerospace supplier Safran SA /zigman2/quotes/206963350/delayed FR:SAF +0.29% said it could review terms of its proposed 8.5 billion euros ($9 billion) purchase of Zodiac. Safran shares dropped 0.8%.
E.ON SE /zigman2/quotes/205877675/delayed DE:EOAN -0.19% fell 3.5% after the German energy company’s 2016 net loss widened to €8.45 billion. “The Uniper spinoff and the funding of nuclear-waste storage left deep marks on our balance sheet,” said E.ON Chief Executive Johannes Teyssen in a statement.
H&M AB shares /zigman2/quotes/208522175/delayed SE:HM.B -0.30% /zigman2/quotes/209826200/composite HNNMY -1.65% dropped 5.1% as the Swedish fashion retailer’s first-quarter sales excluding value-added tax rose 8% to 46.99 billion krona ($5.25 billion), below the 48.03 billion krona analysts had expected in a FactSet survey.
Hikma Pharmaceuticals PLC /zigman2/quotes/204872832/delayed UK:HIK -4.49% /zigman2/quotes/208922860/composite HKMPY +4.23% leapt 8% after the company raised its dividend. Profit in 2016 fell 39% after booking exceptional costs.
Meanwhile, German police raided the offices and homes of Audi AG executives in two German cities in connection with a criminal investigation in the wake of Volkswagen AG’s /zigman2/quotes/204309985/delayed DE:VOW3 +0.13% diesel emissions-cheating scandal, Audi said Wednesday. Audi shares /zigman2/quotes/207972355/delayed DE:NSU +0.63% erased an earlier loss and closed 0.3% higher and Volkswagen dropped 0.8%.
Data: French inflation rose 1.2% on the year in February, slowing from January’s rate, statistics agency Insee said.
The U.K. unemployment rate fell to 4.7%, the lowest rate since 1975. Regular wages grew by 0.8%, adjusted for inflation, in the three months through January, the slowest rate of growth since late 2014.
The figures arrived before Thursday’s Bank of England policy meeting.