- Investors await Fed signals on rates, health of U.S. economy
- U.K.'s FTSE 100 advances after Osborne delivers budget speech
European shares were little changed as a surge in oil helped offset sliding banks, while investors speculated on the Federal Reserve’s latest policy meeting.
Energy stocks jumped as crude rallied after Qatar’s energy minister said some OPEC members will meet with other producers in April to resume talks on capping output. Prudential Plc led insurers higher after an industry levy was raised less than expected in the U.K. budget. UBS Group AG paced lenders lower, sliding 4.8 percent after saying its wealth-management and investment-banking units didn’t recover in the first quarter.
The Stoxx Europe 600 Index added less than 0.1 percent at the close of trading, after falling as much as 0.6 percent and rising 0.5 percent. The U.K’s FTSE 100 climbed 0.6 percent after Chancellor of the Exchequer George Osborne delivered his budget speech, which included measures to cut corporate tax, even as he warned of slower growth.
“Today’s rally in oil is a big help for markets after a two-day selloff,” said Pedro Ricardo Santos, a broker at X-Trade Brokers DM SA in Lisbon. “I’d expect a sideways move for equities and trading to be relatively light until the Fed’s update on monetary policy. Investors will prefer to make a more directional call on the market when we get some clarity from the central bank.”
The volume of shares changing hands on the Stoxx 600 was 20 percent below the 30-day average as investors also watch central banks for indications of how far they will go to support global growth. The Fed announces its rate decision after the close of European markets today.
Fed funds futures show the odds of a U.S. rate increase by the end of June have shot up to about 55 percent from about 6 percent in the past month as data indicated growth is strengthening in the nation. China isn’t headed for a hard landing and the government will ensure expansion hits targets, Premier Li Keqiang said Wednesday in Beijing.
“The focus right now is on how much confidence investors can place on central banks,” said Justin Urquhart Stewart, co-founder of Seven Investment Management in London. His firm oversees about $14 billion. “We’re looking for the Fed to reassure markets that there will be no knee-jerk reactions and no immediate changes -- tightening will be slow and steady, taking account of market confidence. No drama is what we need.”
European equities have still recovered about 12 percent from last month’s low, with commodity producers and banks leading the gains. Before the rebound, concerns about global growth and the efficiency of central-bank stimulus took stocks down 27 percent from an April record.
Automakers posted the best performance of the 19 industry groups on the Stoxx 600 as data showed the region’s car market expanded for a 30th consecutive month in February. Among energy companies, Tullow Oil Plc jumped 7.9 percent after announcing an oil find at a well in Kenya.
Banks fell the most on the European benchmark today. Credit Suisse Group AG lost 4.9 percent, with some traders citing the absence of Chief Financial Officer David Mathers from a conference in London as a reason. Deutsche Bank AG lost 4.4 percent after co-Chief Executive Officer John Cryan said it may post a loss for the year as it overhauls its business.
Among shares moving on corporate news, Brenntag AG jumped 7.2 percent after reporting 2015 profit that exceeded the average analyst projection. Bilfinger SE tumbled 9.2 percent after the German industrial company said it won’t pay a dividend for 2015 after losses widened. Zodiac Aerospace dropped 3.4 percent after the maker of aircraft parts said annual profit probably won’t rise.