European markets ended a choppy session slightly higher on Wednesday, with German stocks leading the charge higher as auto makers advanced after key ratings upgrades.
Gains in the region, however, were kept in check by concerns over North Korea’s nuclear program and insurance companies struggling as Category 5 Hurricane Irma barreled toward the U.S.
After opening in negative territory, the Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +0.59% rose 0.1% to close at 373.95 to snap a two-session losing streak. On Tuesday, the pan-European index slipped 0.1%, losing grip of gains as fears that North Korea would launch another missile spooked investors.
“The same old political uncertainties surrounding North Korea haven’t gone away, but for now traders are becoming immune to all the bluster. While there is no new negative news, we may see some buyers enter the fold,” said David Madden, market analyst at CMC Markets UK, in a note.
He also said the European Central Bank’s rate decision and press conference on Thursday were grabbing investor attention. The key question is whether the policy makers will take the first steps toward tapering its €60-billion-a-month bond-buying program or hold off out of fear of ruining the economic recovery.
“The ECB chief, Mario Draghi, is expected to mention the strength of the euro, and how it is holding back the eurozone recovery. Any signs the ECB are getting nearer tapering, may put pressure on eurozone stocks,” Madden said.
On Wednesday, Deutsche Bank AG’s /zigman2/quotes/205584254/delayed DE:DBK -0.39% Chief Executive John Cryan said the ECB should begin the process of winding down its accommodative monetary policy, regardless of the strength of the euro.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.2305% bought $1.1942, up from $1.1915 late Tuesday in New York.
Irma on the move: Shares of insurance firms were in focus as Hurricane Irma, described as a “potentially catastrophic” Category 5 storm in the Atlantic Ocean, made landfall in the Caribbean. The storm front is seen heading toward the Virgin Islands, Puerto Rico and Florida, where a state of emergency has been declared.
The Stoxx Europe 600 Insurance Index /zigman2/quotes/210599350/delayed XX:SXIP +0.25% dropped 0.4%, as shares of Swiss insurer Zurich Insurance Group AG /zigman2/quotes/208758696/delayed CH:ZURN -0.27% dropped 0.7% and Swiss Re AG /zigman2/quotes/203711779/delayed CH:SREN +0.31% ended 0.9% lower. AXA SA /zigman2/quotes/202169431/delayed FR:CS +0.73% gave up 0.5%.
In other movers, Micro Focus International PLC /zigman2/quotes/207956281/delayed UK:MCRO +6.90% rose 6.2% after the company issued financial results from its new software business, purchased from Hewlett Packard Enterprises.
Hurricane Irma: What You Need To Know
As Hurricane Irma approaches the U.S., here's what you need to know about one of the strongest storms to hit the Atlantic Ocean. Photo: NOAA
Auto cheer: Auto makers in Germany helped prop up the DAX 30 index /zigman2/quotes/210597999/delayed DX:DAX +0.35% , which ended 0.8% higher at 12,214.54. The gain came as new car registrations in Germany rose 3.5% on the year in August.
Shares of Daimler AG /zigman2/quotes/205332368/delayed DE:DAI +1.92% pvowut on 3.2% after Goldman Sachs upgraded the auto maker to buy from neutral.
Outside Germany, shares of Fiat Chrysler Automobiles NV /zigman2/quotes/209202731/delayed IT:FCA +2.42% /zigman2/quotes/204248628/composite FCAU +2.95% jumped 4.3% after Barclays lifted the car manufacturer to overweight from equalweight.
Other indexes: France’s CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 +0.62% ended 0.3% higher at 5,101.41.
Economic data: Orders in Germany’s manufacturing sector unexpectedly dropped in July, falling 0.7% on the month, compared with expectations for a 0.4% rise. But the country’s economics ministry said the level of total orders has remained “very high”.