Major European indexes advanced on Wednesday, with Personal & Household Goods and Health Care sectors leading the upside. Financial Services and Utilities sectors showed the worst performance. The STOXX Europe 600 edged up by 0.09% to 459.04 points. It is the 6th straight week of gains for the European index. The best performing stocks on the STOXX Europe 600 were Ambu A/S (+5.1%), Gerresheimer AG (+4.7%), and Argen-X (+4.1%). The worst performing stocks were Auto1 Group SE (-10.9%), Verbund AG (-4.6%), and Prosus N.V. (-3.8%).
The FTSE 100 jumped by 0.54%, the CAC 40 rose by 0.16%, the DAX increased by 0.12%, the FTSE MIB gained 0.16%, and the IBEX 35 decreased by 0.25% Shares of Dutch multinational automaker Stellantis increased by 0.4% after the company announced it would establish production of EV batteries in Termoli, Italy. Italian aerospace and defense corporation Leonardo has announced it would sell its Global Enterprise Solution division for $450 million. The company stock rose by 2.5% after the announcement. Shares of French cosmetics company L'Oreal gained 0.2% after the company had successfully launched a €3 billion bond. The market capitalization of British Petroleum and Shell has increased by 3.4% and 2.4% respectively thanks to rising crude oil prices.
Market players are focused on the conflict in Eastern Europe and await Joe Biden's trip to the EU. The US president is scheduled to attend G7 and NATO summits. Furthermore, he is set to address the European Council. These summits can lead to more sanctions being imposed on Russia, analysts say. Earlier, major European indexes closed in positive territory, with financial services companies showing the best performance during the session. The STOXX Europe 600 increased by 0.85% to 458.65 points on Tuesday. Stocks of Deutsche Bank (+5.6%) and Ubisoft Entertainment (+5.5%) led the upside. The biggest losers of the session were MorphoSys AG (-9.3%), Kingfisher (-6.3%), and Diploma plc (-5.8%). The FTSE 100 gained 0.46%, reaching 7,476.72 points. The CAC 40 grew by 1.17% to 6659,41 points, and the DAX increased by 1.02% to 14,473.2 points.
Shares of German software developer for construction industry Nemetschek SE jumped by 10% on Tuesday after the company released a strong 2021 annual report. The market capitalization of Polish video game developer CD Projekt S.A. increased by 1.7% after the developer confirmed it was working on the new game in The Witcher series. On Tuesday, market players focused on Fed policy decisions. Last Wednesday, the Federal Reserve increased the key interest rate by 25 basis points for the first time in 4 years. Currently, the target range for the Fed funds rate is 0.25-0.5% per annum. Jerome Powell, chairman of the Federal Reserve, stated the regulator was ready to tighten monetary policy more aggressively and hike the rate by more than 25 basis points, if necessary. Powell said the Fed would decide on increasing the rate further on every upcoming meeting, based on latest statistic data.
Investors did not have a strong negative reaction to the Fed's hawkish policy, market analysts noted. The regulator pointed out the US economy is strong enough for a more aggressive policy shift. US and EU bank stocks found support in Jerome Powell's comments. Banko de Sabadell S.A. increased by 3.9%, while Commerzbank AG rose by 3.6%. HSBC Holdings Plc and Standard Chartered Plc gained 3.2% and 2.6% respectively.
