Source: Sharecast
The Stoxx 600 rose 0.5% to finish at 550.85, its highest close since 24 July, with gains of around 0.6-0.7% registered in Frankfurt, Milan and Paris, and a 1.1% surge in Madrid, met with a more subdued performance in London (up just 0.2%).
Markets started on the front foot after data on Tuesday showed a smaller-than-expected rise in US inflation, lifting stocks on Wall Street and Asia overnight.
“The market is getting excited about interest rate cuts from the Fed, and the US Treasury Secretary has poured a large can of fuel on the fire,” says Danni Hewson, head of financial analysis at AJ Bell.
In an interview with Bloomberg on Wednesday, Treasury Secretary Scott Bessent said he predicts a 50 basis-point cut from the Fed at its next meeting in September. He also said he thinks interest rates should be 150-175bp lower than they are currently.
"Donald Trump will also be choosing the next Fed Chair to take office from next May after Jay Powell’s term expires, and those who want a shot at the title, both inside and outside the Fed, will need to sing for their supper. And the song, in case there is any doubt, is a call for lower interest rates," Hewson said.
In other news, the International Energy Agency has raised its oil supply outlook for 2025 by nearly 400,000 barrels of oil per day after recent announcements by eight OPEC+ members that they would up production from September. Global oil supply growth has been revised to 2.5m b/d this year, from 2.1m b/d previously, after the members of the oil cartel agreed on 3 August to raised production by another 547,000 b/d next month, fully unwinding the 2.2m b/d cuts put in place since April.
Market movers
Frankfurt-listed holding company Porsche Automobil Holding, otherwise known as Porsche SE, rose despite slashing its profit forecasts for 2025, as it announced a diversification of the business to focus further on the defence sector.
Travel firm TUI jumped after posting stronger-than-expected third-quarter earnings, citing both resilient summer travel demand and solid performances across its hotels and cruise divisions.
BNP Paribas is reportedly in advanced talks to buy Mercedes-Benz Group’s leasing unit Athlon, with shares in both companies rising. Bloomberg cited people familiar with the matter as saying that a deal could value the business at about €1 billion.
In London, Spirax Group was the top gainer again, having surged on Tuesday on the back of better-than-expected first-half results, while specialist insurer Beazley tumbled as it posted a drop in first-half profit and cut its full-year premium growth guidance.
