European Shares Rise as Investors Await Federal Reserve Chair Powell's Testimony
European shares advanced on Wednesday, driven by strong corporate earnings despite weak oil and metal prices. Investors are eagerly awaiting Federal Reserve Chair Jerome Powell's second day of testimony for more insights on interest rates.
The pan-European index rose 0.2%, with real estate shares leading the gains. However, basic resources were down 0.5% due to declining oil and base metals prices.
French stocks saw a 0.2% increase after a previous session drop, as investors monitored the political landscape post Sunday's legislative election.
Powell mentioned on Tuesday that inflation is above the Fed's target but has been improving recently. More positive data could strengthen the case for interest rate cuts. His testimony before the House Financial Services Committee is scheduled for 1000 GMT.
Investors are also keeping an eye on June inflation data from the U.S. and Germany, set to be released on Thursday.
Deutsche Bank analysts forecast a slight increase in earnings and sales for Q2, marking the first positive year-over-year growth rate since Q1 2023.
Norwegian aerospace company Kongsberg Gruppen surged 8.1% after reporting strong revenue growth and improved margins. Spanish grid operator Enagas rose 3.6% after agreeing to sell its stake in Tallgrass Energy to Blackstone for $1.1 billion.
On the flip side, UK's Barratt Developments slid 2.4% as it projected a decline in home-building targets due to high mortgage rates and economic concerns. Travis Perkins jumped 4.4% after naming a new CEO, while Volkswagen shares slipped 2.2% amid talks of closing the Brussels site of its Audi brand.
In conclusion, market movements are driven by corporate earnings, inflation data, and interest rate expectations. Investors should stay informed about these factors to make informed decisions about their finances and investments.