(Reuters) – European stocks closed at an all-time high on Wednesday, despite cautiousness ahead of a US Federal Reserve meeting that could allow it to outline plans to begin the unwinding of the stimulus.
The pan-European STOXX 600 rose 0.2% to a record high of 459.86 points, marking its longest streak in three and a half years with a ninth consecutive positive session.
Travel and leisure, utilities and chemicals stocks were the top performers, with investors betting on a surge in consumer demand and industrial output.
But banks fell 0.9% on losses in shares of Banco Sabadell, Santander and Caixabank, after Spain’s competition watchdog opened an investigation into possible anti-competitive practices in the marketing of state-backed coronavirus loans.
The Spanish stock market trailed its regional peers for the day, down 0.3%.
The benchmark STOXX 600 has now risen for five straight weeks, with a regular vaccination schedule expected to boost regional economic growth. But a recent rise in inflation has raised concerns about an earlier-than-expected tightening of global monetary policy.
After accommodating signals from the European Central Bank last week, the Fed should at least signal the imminent start of talks on when and how to exit the policies put in place at the start of the COVID-19 pandemic.
“The Fed should leave its policy unchanged and once again minimize discussions on tapering. Nonetheless, markets will be looking for clues as to whether the Fed is starting to recognize that inflation may not be as transient as thought, ”ING analysts wrote in a note.
In Europe, travel and leisure stocks rose 1.3% after steep losses on Tuesday, while utilities added 1%.
London’s FTSE 100 rose 0.2% even as data showed UK inflation unexpectedly exceeded the Bank of England’s 2.0% target in May and looked set to rise further then that the country reopens its economy after the blockages. [.L]
Shares of German software giant SAP fell 1.2%, weighing on the DAX after disappointing earnings forecasts from US software rival Oracle Corp.
Spanish solar energy developer Solarpack jumped 43% as it published a takeover bid for Swedish fund EQT worth up to 881.2 million euros ($ 1.07 billion).
EQT stock fell 1.2%.
Reporting by Sagarika Jaisinghani and Ambar Warrick in Bengaluru; Editing by Shounak Dasgupta, Uttaresh.V and Alexander Smith