By Carla Mozee, MarketWatch
A broad gauge of European stocks finished modestly higher Wednesday, making some headway after swinging in and out of the red, as investors looked ahead to the U.S. Federal Reserve’s latest monetary policy decision. An update from the European Central Bank set for Thursday also was in focus for investors.
How did markets perform?
The broader Stoxx Europe 600 Index /zigman2/quotes/210599654/delayed XX:SXXP -0.42% closed up 0.2% at 388.25, led lower by the telecom and oil and gas sectors. But the tech and basic materials sectors led advancers. On Tuesday, the pan-European index fell 0.1%.
German and Italian stocks were the key contributors to Wednesday’s gain. Germany’s DAX 30 index /zigman2/quotes/210597999/delayed DX:DAX -0.50% rose 0.4% to 12,890.58, pushing past earlier weakness. Italy’s FTSE MIB index /zigman2/quotes/210598024/delayed IT:I945 -0.74% also finished up by 0.4% to reach 22,216.18.
But France’s CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 -0.75% shed less than 1 point to end at 5,452.73, and Spain’s IBEX 35 /zigman2/quotes/210597995/delayed XX:IBEX -0.57% fell 0.2% to 9,899.10. The U.K.’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.28% lost less than 1 point, closing out the session at 7,703.71.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.0259% traded at $1.1785, slightly up from $1.1745 late Tuesday in New York.
What’s driving markets?
European stocks overall ran into a headwind in the form of data showing industrial production in the eurozone fell by a larger-than-expected 0.9% rate in April. That’s underscored some questions about the strength of the economy at a time when the European Central Bank is discussing when to end its €2.5 trillion ($2.95 trillion) program of bond buying, or quantitative easing.
Investors are expecting to hear more about the timing when the ECB releases its statement Thursday at 12:45 London time, or 7:45 a.m. Eastern Time. ECB President Mario Draghi will hold a press conference at 1:30 London time, in Riga, Latvia.
Investors are in the thick of central bank action for the week. The Fed is expected to issue its monetary policy decision after the close of European trade on Wednesday, and moves by the U.S. central bank are closely watched as they have an impact on interest rates and investment decisions world-wide. The Bank of Japan is scheduled to release its monetary policy update on Friday.
Fed in focus
The Fed, led by Chairman Jerome Powell, should issue its target range for the federal-funds rate at the end of its two-day meeting on Wednesday. Investors are pricing in expectations for a rise of 25 basis points to 1.75% to 2%, from the current range of 1.5% to 1.75%. That would be the second U.S. interest rate hike this year. The decision is due at 7 p.m. London time, or 2 p.m. Eastern Time.