Europe close: Stocks little changed ahead of Fed Minutes
By Alexander Bueso
Date: Thursday 24 Nov 2022
(Sharecast News) - European shares edged ahead on Wednesday as flash PMIs from the eurozone came in higher than expected.
The pan-regional Stoxx 600 was up 0.6% at 438.82, with major bourses on the Continent on either side of slightly higher to drifting lower, as investors waited on the release of the minutes from the Federal Reserve's November policy meeting for any indication on the pace of future rate hikes.
In Germany, the Dax edged up by 0.04% to 14,427.59, the Cac-40 rose 0.34% to 6,679.09 and the FTSE Mib drifted lower by 0.04% to 24,581.14.
A flash reading of S&P Global's Eurozone manufacturing purchasing managers' index increased to 47.3 in November from 46.4 in October, above market forecasts for a reading of 46.
The flash reading pointed to a fifth straight monthly drop in factory activity, with the rate of production decline easing but still sitting at the second-higher level recorded over the ten years, excluding the height of the Covid-19 pandemic.
"The optimists were back in the driving seat, amid light volumes in a shortened US trading week and ahead of the latest Federal Reserve minutes," said Interactive Investor head of Markets Richard Hunter.
"In a slight change to sentiment, there are hopes that the aggressive Fed rate hikes so far means that the terminal rate will be hit sooner, which is currently estimated to be around 5% from the current 4%."
"Alongside comments from some Fed members suggesting that reduced hikes may be possible if a recently promising inflation number is the beginning of a downward trend, investors sought solace in the fact that the end of the year could signal the start of a slowdown for both."
In equity news, Glencore shares rose as it agreed amended terms on the sale of its Australia CSA copper mine. The stock was also boosted by an upgrade to 'outperform' by Bernstein.
Credit Suisse retreated after the bank issued a profit warning, saying it expects to make a pre-tax loss of up to 1.5 billion Swiss francs in the fourth quarter.
Animal genetic company Genus fell as it said it expected higher interest costs this year.
Johnson Matthey jumped even as it reported weaker first-half profits.
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