European stocks close higher ahead of central bank meetings

Key Points
  • The European Central Bank (ECB) meets on Thursday to decide its latest monetary policy, with markets cautiously hopeful of a fresh stimulus package to boost the ailing euro zone economy.
  • Senior White House adviser Peter Navarro on Tuesday moved to calm expectations for the next rounds of U.S.-China trade talks, which are set to begin in October.

European stocks traded higher Wednesday as investors look ahead to key central bank meetings, while China signaled a thawing of trade tensions with the U.S.

The pan-European Stoxx 600 provisionally rose 0.77% by the session end, basic resources jumping out to 1% gains while oil and gas and autos were the only sectors trading in negative territory.

The European Central Bank (ECB) meets Thursday to decide its latest monetary policy, with markets cautiously hopeful of a fresh stimulus package to boost the ailing euro zone economy.

China on Wednesday moved to exempt 16 types of U.S. products from its additional retaliatory tariffs. These include whey and fish meal, used as animal feed, along with some lubricants, according to a statement from the Chinese Ministry of Finance. The exemption will be valid for a year from September 17.

Beijing is also expected to buy more U.S. agricultural products in the hope of sweetening Washington's stance on trade and securing a better deal, the South China Morning Post reported on Tuesday.

Asian shares traded mixed Wednesday afternoon, with mainland Chinese shares mostly lower while indexes in Hong Kong, Japan and South Korea advanced.

The U.K.'s political turmoil returned to the headlines on Wednesday after a Scotland's highest court ruled that Prime Minister Boris Johnson's suspension of parliament until October 14 was unlawful. Although it is unclear what material impact the ruling will have, opposition lawmakers are already calling for parliament to be recalled.

European banks have been voicing increasing concerns about the ECB's rock-bottom interest rates ahead of the central bank's meeting on Thursday, with the ECB Governing Council expected to double down on a policy which squeezes their profits. The president of Germany's savings banks association joined Dutch bank ING on Tuesday in lambasting loose monetary policy.

Back in Washington, the departure of hawkish U.S. National Security Advisor John Bolton sent oil prices southwards on Tuesday, with his exit seen as lessening the chance of a military conflict between the U.S. and Iran.

Stocks on the move

British instrumentation group Spectris saw its shares rise 7.2% during a trade, its biggest one-day gain since November 2018.

London Stock Exchange (LSE) Group shares added 6.3% after the Hong Kong Exchanges and Clearing made a $36.6 billion bid to combine the two companies.

At the other end of the European blue chip index, Spanish clothing company Inditex slid 3.9% after slightly missing first-half earnings expectations, while French utility company Veolia fell 2.1%.