Europe Markets

European stocks close mostly higher amid recovery hopes, inflation fears

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Key Points
  • The pan-European Stoxx 600 ended the session up by about 0.3%, with autos shares rising 1.3% to lead gains.
  • Markets were given a boost on Tuesday by strong manufacturing activity data out of the U.K. and the euro zone.
  • But fears around rising inflation, and the ways in which central bankers might respond, have weighed on sentiment.

LONDON — Stock markets in Europe closed mostly higher on Wednesday as investors weighed up optimism over the region's economic recovery and fears over rising inflation.

The pan-European Stoxx 600 ended the session up almost 0.3%, with autos shares rising 1.3% to lead gains as most sectors and major bourses closed in positive territory.

On Wall Street, the major U.S. indexes all posted gains, with the S&P 500 hovering near an all-time high following its muted start to June.

Gains appeared to be capped, however, by fears of rising inflation and the ways in which central bank policymakers might respond.

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Investors in the U.S. and Europe are looking ahead to key U.S. jobs data later this week and upcoming meetings of the Federal Reserve and the European Central Bank.

Markets were given a boost on Tuesday by strong manufacturing activity data out of the U.K. and the euro zone, while concerns over inflation continue to temper optimism.

Euro zone producer prices climbed by more than expected on April on the back of a surge in energy prices, the EU statistics office revealed Wednesday. Factory prices across the bloc rose by 1% month-on-month and 7.6% annually, slightly exceeding economist expectations.

Investors interested in Russia will be watching for comments from officials and business leaders attending the St. Petersburg International Economic Forum.

Russia's central bank governor, Elvira Nabiullina, told CNBC ahead of the start of the forum that as the economy moves online, digital currencies will be the future of financial systems.

Deal-making was a key driver of individual share price action on Wednesday. Italy's Interpump Group climbed 6.3% toward the top of the Stoxx 600 after agreeing to purchase White Drive Motors and Steering for 230 million euros ($280.72 million).

Meanwhile, German pharmaceutical company MorphoSys plunged more than 12.9% after announcing the acquisition of U.S. cancer specialist Constellation Pharmaceuticals for $1.7 billion.

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- CNBC's Ryan Browne, Pippa Stevens and Eustance Huang contributed reporting to this story.