At the close of trading on Wednesday, the main EU stock indices advanced amid rising risk appetite. In addition, market participants were awaiting the results of the FOMC meeting. They also continued to monitor news on the Russia- Ukraine conflict. The STOXX Europe 600 Index grew by 3% to 448.45. The biggest gainers were Dutch conglomerate Prosus NV (+23.2%), Norwegian IT company Adevinta ASA (+15.8%), and Russian mining giant Polymetal International PLC (+14%).
The FTSE 100 Index jumped by 1.62% to 7291.68, while the CAC 40 index added 3.68%, hitting 6588.64. The DAX rose by 3.76%, approaching a 2-week high of 14440.74.
The shares of E.ON, the largest German energy supplier, climbed by 3.8%. The day before, the company reported an increase in adjusted net profit by 53% in annual terms following the results of last year. The earnings result significantly exceeded market expectations. E.ON also points out that it expects a decrease in adjusted profit in 2022. The company is unable to assess the negative consequences of the Russia-Ukraine conflict for its operation yet.
The capitalization of EQT AB, the Swedish investment company, soared by 13% after it announced the acquisition of rival private-equity firm Baring Private Equity Asia for $ 7.5 billion. On Wednesday, risk sentiment significantly increased in global markets. The stock indices of the Asia-Pacific region closed in the black. The Hang Seng index surged by 9% amid information that the Chinese authorities will adopt new rules for supervising the listing of companies on foreign exchanges. Meanwhile, the US stock markets also reported stable growth of 1-2%. On Thursday, investors are anticipating the publication of the results of the FOMC meeting. According to preliminary estimates, the US regulator will raise the key rate to 0.25-0.5% per annum. Such an increase will be the first since the fall of 2018.
In addition, the Bank of England's meeting is scheduled for Thursday. Analysts assume that the central bank will announce a rate hike to 0.75% from 0.5% per annum. As widely expected, the ECB kept the interest rate at zero and the deposit rate at minus 0.5% at the meeting last week. At the same time, the regulator adjusted the volume of asset purchases. Monthly net purchases under the APP will amount to €40 billion in April, €30 billion in May and €20 billion in June.
Apart from that, the watchdog downgraded the forecast for Eurozone GDP growth from 4.2% to 3.2% in 2022. Analysts reckon that traders were disappointed by the lack of reaction from the ECB to the war in eastern Europe. Following the conflict between Russia and Ukraine, Western states have permanently imposed sanctions against Russia. Last week, President Joe Biden banned the import of petroleum products from Russia. Large global corporations have partially or completely suspended their activities in Russia despite the prospects of s drop in their own profits.
Geopolitical tensions in eastern Europe remain in the limelight this week. The day before, Russian Foreign Minister Sergei Lavrov announced that there was hope for a compromise in negotiations with Ukraine. At the same time, Western media publish quotes from speeches of Ukrainian President Vladimir Zelensky, e.g. that talks with Russia were sounding 'more realistic'.
