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Investing.com — European stock markets edged largely higher Wednesday, with the German market underperforming ahead of a key business sentiment gauge as well as a meeting of Federal Reserve policy makers.
At 3:35 AM ET (0735 GMT), the DAX in Germany largely flat, while the CAC 40 in France rose 0.3% and the U.K.’s FTSE 100 gained 0.2%.
European markets received a positive handover from Wall Street overnight, with the Nasdaq Composite and S&P 500 closing at record highs, but trading in Asia was more low-key and Europe has followed suit.
The German markets have underperformed Wednesday after the country’s exports to China, Germany’s second biggest sales market outside the European Union, declined by 3.9% year-on-year, the biggest slump since May 2020, when the world was gripped in the first wave of the coronavirus pandemic.
This comes ahead of the publication of the German Ifo Institute’s business climate index for August, at 4 AM ET (0800 GMT), which is expected to decline for a second straight month.
That said, the main focus this week is the Federal Reserve’s annual economic symposium, held this year online instead of at Jackson Hole, due to the spread of Covid-19. Fed Chair Jerome Powell’s remarks on Friday will be carefully studied for any clues regarding the timing for the central bank’s tapering of asset purchases.
The European earnings season is almost over, and it has been a largely successful one, with European profits expected to have jumped 151% in the second quarter, according to the latest Refinitiv I/B/E/S data. This has helped support stocks, with most of the region’s major benchmark indices not far removed from record levels.
One of the sectors in the spotlight has been U.K. supermarkets amid private equity interest. This is set to promote WM Morrisons (LON:MRW) into the FTSE 100 index, Britain’s blue chip benchmark, as its share price has surged over 60% since receiving an offer from private equity firm Clayton, Dubilier & Rice in June.
Elsewhere, oil prices retreated Wednesday, handing back some of the market’s recent gains with demand in the U.S., the world’s largest consumer, appearing to hold up despite rising Covid cases.
Data from the industry group the American Petroleum Institute, released late Tuesday, showed crude inventories fell 1.6 million barrels for the week ended Aug. 20, while gasoline stockpiles fell 1 million barrels.
Official data from the U.S. Energy Information Administration is due to be released later Wednesday.
By 3:35 AM ET, U.S. crude futures traded 0.1% lower at $67.52 a barrel, while the Brent contract fell 0.1% to $70.36. Both contracts have risen by around 8% over the previous two days, helped by the loss of more than 400,000 barrels per day of supply in Mexico after a fire on an oil platform.
Additionally, gold futures fell 0.8% to $1,794.35/oz, while EUR/USD traded 0.1% lower at 1.1740.
