European Stocks Close Higher Amid Optimism Over ECB Rate Cut

(RTTNews) - European stocks closed higher on Wednesday amid rising optimism about an interest rate cut by the European Central Bank (ECB) tomorrow. Data showing an increase in Eurozone Composite PMI, and growth in France's industrial output helped as well in lifting investor sentiment.

The pan European Stoxx 600 climbed 0.81%. The U.K.'s FTSE 100 gained 0.18%, Germany's DAX climbed 0.93% and France's CAC 40 jumped 0.87%, while Switzerland's SMI ended stronger by 1.17%.

Among other markets in Europe, Austria, Denmark, Finland, Greece, Netherlands, Poland, Russia, Spain and Sweden ended higher.

Belgium, Norway, Portugal and Turkiye closed weak, while Iceland ended flat.

In the UK market, St. James's Place and Smith & Nephew gained about 3.6% and 3.3%, respectively. Rentokil Initial, Ocado Group, GSK, Scottish Mortgage, RightMove, Ashtead Group, Admiral Group, Pershing Square Holdings, Fresnillo, Haleon, Imperial Brands, Pearson and Diploma gained 1.5 to 2.6%.

B&M European Value Retail tumbled 7.2%. National Grid lost 6.6%. Centrica ended down 4.8% after saying its performance so far this year has been in line with analyst expectations.

JD Sports Fashion ended lower by 4.6%. Lloyds Banking Group, Sainsbury (J), Mondia, Next, Anglo American Plc and Frasers Group also ended notably lower.

In the German market, Sartorius rallied more than 4%. Merck, Siemens, Deutsche Post, SAP, Daimler Truck Holding, Deutsche Telekom, Fresenius and Infineo gained 1.4 to 1.8%.

Covestro, Puma, RWE, Zalando, Commerzbank, Porsche, BMW and Continental lost 0.6 to 1.7%.

In the French market, STMicroElectronics climbed more than 3%. Hermes International, LVMH, Schneider Electric, Capgemini, Essilor, Veolia, Air Liquide, Legrand, Dassault Systemes, Stellantis and AXA also posted strong gains.

Teleperformance, ArcelorMittal, Accor, Societe Gernerale and Credit Agricole lost 1.3 to 2%.

On the economic front, Eurozone private sector posted the fastest growth in a year in May as strong demand boosted production and hiring amid cooling inflation, the final Purchasing Managers' survey data compiled by S&P Global showed.

The HCOB composite output index posted 52.2 in May, up from 51.7 in the previous month. The flash reading was 52.3. The reading indicated that the private sector showed the strongest increase in economic activity since May 2023.

The services PMI came in at 53.2 in May, which was broadly unchanged from April's 11-month high of 53.3. The flash reading was also 53.3.

Data from Eurostat showed eurozone producer prices slid 5.7% on a yearly basis in April, weaker than the 7.8% drop in March. Prices were forecast to fall at a much slower pace of 5.1%.

France's industrial production expanded as expected in April after falling in the previous month, data from the statistical office INSEE showed on Wednesday.

Industrial output advanced 0.5% on a monthly basis, reversing a 0.2% fall in the previous month. Further, this was the strongest rise in five months. Similarly, manufacturing output rebounded 0.4% in April versus a 0.4% decline in March.

The UK service sector growth moderated in May as growth momentum in business activity and new orders softened from their 11-month highs reported in April, final survey data from S&P Global showed on Wednesday. The S&P Global services Purchasing Managers' Index dropped to 52.9 in May, in line with the flash estimate, from April's 11-month high of 55.0.

Demand in the British car market rose for the twenty-second consecutive month in May and sales logged the best performance for the month since 2021, data from the Society of Motor Manufacturers & Traders, or SMMT, showed. New car registrations grew by 1.7% annually to reach 147,628 units in May.