European stocks settled higher on Wednesday, bouncing from losses in the previous session as investors focussed on upcoming interest rate cuts and a key U.S. inflation report later this week.
The continent-wide STOXX 600 index was up 0.6%, with the automobiles and parts sector, which has lagged for most of the year, among top gainers with a 1.1% jump.
Continental gained 7.2% after the German automotive supplier forecast profitability in its automotive business to improve in the third quarter. Germany’s DAX index outperformed the STOXX with a 1% jump.
On the flipside, banks underperformed as Dutch lender ING dropped 2.5% after Deutsche Bank downgraded the stock to “hold”, calling 2024 a peak for capital returns and share buybacks. The benchmark STOXX 600 touched a two-week low on Tuesday, with China-exposed mining and luxury sectors taking a beating as investors were disappointed by a lack of fresh stimulus steps from Beijing.
All eyes will be on a news conference by China’s finance ministry on Saturday for new details on fiscal stimulus. Defensive sectors prop up Europe’s STOXX 600 as China jitters persist Other major catalysts this week include the minutes of the Federal Reserve’s last meeting, U.S.
consumer prices data and U.S. bank earnings.
The Fed cut rates by a large 50 basis points last month. Investors expect two more rate cuts of 25 bps each this year. Meanwhile, many European Central Bank policymakers argued their case for another interest rate cut next .
