Europe close: Shares close in bullish mood ahead of Fed meeting
By Frank Prenesti
Date: Wednesday 22 Sep 2021
(Sharecast News) - European stocks closed in bullish mood on Wednesday ahead worries over Asian property developer China Evergrande abated slightly and investors turned their attention to the latest policy announcement from the US Federal Reserve due later in the day.
The pan-European STOXX 600 closed 0.99% higher. Investors are waiting on comments later today from the US Federal Reserve for any sign of plans to taper asset purchases.
"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.
"However, with weaker employment numbers of late and the jobs market still almost six million shy of pre-pandemic levels, one of the Fed's key requirements has not yet been met."
"At the same time, a combination of supply chain issues and spikes in the Delta variant have tapped the brakes on the economic recovery, prompting downgrades of the outlook for this year. The additional complication of elevated inflation adds to the mix and, in this brittle environment, the comments will receive extra scrutiny."
In equity news, Evergrande's Frankfurt-listed shares surged 43.2% after the company, which owes $300bn, said it would make a coupon payment on its domestic bonds.
China's central bank also injected 120bn yuan (£13.6bn) of liquidity into markets through reverse repurchase agreements of short-term bonds from commercial banks.
Entain gained after the UK gambling firm revealed a takeover proposal from Boston-based DraftKings.
Rival Flutter Entertainment gained as it reported that a legal dispute with the Commonwealth of Kentucky has now been settled in full, as it updated investors on its Australian division, Sportsbet.
Antofagasta rose to the top of the Stoxx on firmer commodity prices, which also pushed up, Glencore and Anglo American.
Deutsche Post fell after US delivery firm FedEx Corp cut its full-year forecast after labour shortages hit earnings and slowed packages shipments.
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