By Barbara Kollmeyer
European stocks logged a second day of gains on Wednesday, led by banks and energy companies, as investors waited for a Federal Reserve decision and the newsflow over troubled China property giant turned slightly positive.
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP -0.51% rose 0.6% to 461.72, following a 1% gain on Tuesday. The German DAX /zigman2/quotes/210597999/delayed DX:DAX -0.09% also rose 0.6%, while the French CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 -0.42% jumped 1.1% and the FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX -0.44% gained 1.3%.
The Fed decision will come after the close of European markets, while a Bank of England meeting will take place on Thursday.
“The Fed is expected to reiterate its stance on a tapering of its bond buying programme, with the consensus still believing that December will most likely signal the firing of the starting gun,” said Richard Hunter, head of markets at Interactive Investor, in a note to clients.
Shares of Frankfurt-listed shares of China Evergrande climbed 40% on Tuesday — Hong Kong markets were closed — after onshore unit Hengda Real Estate Group pledged to make an on-time interest payment on Thursday . The larger conglomerate is still facing millions of dollars in crucial interest repayments on debt this week.
Banks were leading the gains, with shares of HSBC Holdings /zigman2/quotes/208272822/composite HSBC -0.03% /zigman2/quotes/203901799/delayed UK:HSBA -0.23% surged 4%, recouping the bulk of losses it has seen this week. Stock of BNP Paribas /zigman2/quotes/206351084/delayed FR:BNP -0.07% climbed 3% and Banco Santander /zigman2/quotes/202859081/composite SAN -1.23% /zigman2/quotes/205677933/delayed ES:SAN +0.69% was up nearly 3%.
Energy names climbed in step with gains for oil prices /zigman2/quotes/209723049/delayed CL00 +1.23% , which rose 1% on expectations for another drop in U.S. inventories. Brent crude oil prices were also higher. That led to gains across the energy sector, with TotalEnergies /zigman2/quotes/206172043/delayed FR:TTE +0.84% /zigman2/quotes/201824152/composite TTE -0.12% up nearly 3%, while BP /zigman2/quotes/202286639/delayed UK:BP +0.38% /zigman2/quotes/207305210/composite BP +0.34% and Royal Dutch Shell were up 2%.
Shares of mining group BHP /zigman2/quotes/208108397/composite BHP -1.13% /zigman2/quotes/206213719/delayed UK:BHP -0.64% rose 3% despite a downgrade from Bank of America, which cut the group to neutral from buy, saying it expected earnings downgrades.
A team of analysts led by Jason Fairclough cited China’s disappointing economic growth and steel policy as a negative for iron ore demand, and “driving a major price correction.” The bank cut its iron ore forecast for 2022 by 45% to US$91 a ton and its copper forecast by 21% to US$9875 a ton.
A top riser was Entain /zigman2/quotes/207493593/delayed UK:ENT -4.20% , up nearly 6% after the gambling and betting company said it was considering a new takeover offer from U.S.-based DraftKings /zigman2/quotes/213120645/composite DKNG +0.13% . Entain runs the BetMGM joint venture with MGM Resorts in the U.S.