© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, December 21, 2023. REUTERS/Staff/File Photo
By Shashwat Chauhan
(Reuters) -European shares advanced on Wednesday as robust China data lifted miners, while tech stocks benefited from an overnight rally on Wall Street amid persisting optimism the Federal Reserve could begin cutting rates as early as next March.
The pan European gained 0.2% as of 0920 GMT, following an over 0.4% increase in major Wall Street indexes overnight. [.N]
Basic resources was amongst the top gainers, rising 0.8% as most base metal and iron ore prices advanced after data showed manufacturing activity in top consumer China improved last month. Energy stocks leaped 1.2%.
The technology sector, which houses Europe’s major chipmakers, jumped 0.8%, in line with their Wall Street peers.
On the downside, telecoms and insurers fell 0.4% and 0.2%, respectively.
Volumes are expected to be light as traders return from an extended Christmas break and with only a few trading days left in 2023.
The STOXX 600’s seven-week winning streak has helped push the pan-European benchmark up nearly 13% so far this year, with retailers and technology stocks amongst the best-performing sectors.
Global markets have rallied since mid-December when the Fed hinted at rate cuts next year. However, the European Central Bank (ECB) does not share a similar outlook.
“Pricing for the first ECB cut in March or April 2024 has been relatively consistent, but the gap versus the Fed is no longer considered wide,” said Geoff Yu, EMEA macro strategist at BNY Mellon (NYSE:).
“There is also very little difference between ECB and Fed policymakers’ pushback against current pricing, though considering the labour market situation on the ground, we believe the Fed’s warnings are more credible.”
Among individual stocks, Bayer (OTC:) rose 2.2% after the German drugs-to-pesticides group said it has won a trial in a lawsuit brought by a California man who said he developed cancer from exposure to its Roundup weedkiller.
Vestas Wind Systems jumped 6.0% after the Danish wind turbine-maker announced a number of new orders around Christmas time.
UK’s Anglo American (JO:) advanced 3.9% after a report stated the miner is gearing up to sell a minority stake in Woodsmith, Britain’s biggest mining project.