European stock markets edged higher on Wednesday, rebounding after the previous session’s losses ahead of key regional activity data as investors await the European Central Bank’s latest policy meeting.
At 03:05 ET (07:05 GMT), the DAX index in Germany traded 0.4% higher, the CAC 40 in France rose 0.5%, and the FTSE 100 in the U.K. gained 0.3%.
PMIs Due Before ECB Meeting
The European Central Bank meets on Thursday, and an interest rate cut of 25 basis points from record-high levels is widely expected.
Persuaded by signs of moderating inflation in Europe, policymakers at the ECB have all but promised to ratchet down borrowing costs at their gathering on Thursday.
In a note to clients, analysts at Citi said the region’s equities “typically” receive some support from rate cuts, adding that they will likely be boosted by an “inflecting earnings picture” as well.
While a cut on Thursday is largely seen as a certainty, there remain doubts about what the ECB will agree to in terms of rate cuts for the rest of the year after a slightly higher than expected May inflation print in the eurozone on Friday.
French industrial production rose 0.5% on the month in April, an improvement from the drop of 0.2% the prior month, but most eyes Wednesday will be on the final eurozone purchasing managers’ index data for May, a measure of services and manufacturing activity in the single currency area.
Inditex Impresses with Q1 Sales
In corporate news, Inditex (BME) stock rose over 4% after the world’s largest listed fashion retailer said its sales grew by 7% in the first quarter of its fiscal year, while net profit rose 11%.
The company has outperformed competitors in recent quarters, benefiting from investments in new in-store and online experiences.
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