European markets climb as investors brace for latest Fed decision; Stoxx 600 up 1.5%
LONDON — European stocks advanced on Wednesday as investors braced themselves for the latest monetary policy announcement from the U.S. Federal Reserve.
The pan-European Stoxx 600 added 1.5% in early trade, with travel and leisure stocks jumping 4.1% to lead gains as all sectors and major bourses entered positive territory.
In terms of individual share price movement, Britain’s Allfunds Group climbed 6.6% after Citigroup upgraded the company’s stock to “buy” from “neutral.”
At the bottom of the European blue chip index, Swedish hygiene products group Essity fell 4.6% after reporting a larger-than-expected fall in fourth-quarter profit as distribution costs squeezed margins.
The positive trade for Europe comes after markets in the region closed higher on Tuesday, recouping some losses from Monday’s sharp sell-off as investors sifted through a fresh batch of corporate earnings.
On Wednesday, however, global investors are focused on the latest policy update from the Fed when its two-day meeting ends.
Essentially, market participants are eager to know when the central bank will raise interest rates and by how much. The Fed is expected to signal a rate hike as soon as March and more policy tightening on the table to address high inflation. An interest rate decision is slated for Wednesday at 2 p.m. ET.
Geopolitical tension at the Russia-Ukraine border continued to dominate market concerns too. President Joe Biden spoke with European leaders Monday amid fears of a possible Russian invasion of Ukraine and on Tuesday, he said that he would consider imposing personal sanctions on Russian President Vladimir Putin if Russia attacked its neighbor.
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