LONDON – European equities advanced Tuesday morning as market attention focused on the global economic recovery and the latest US Federal Reserve meeting.
The pan-European Stoxx 600 added 0.5% at the start of trading, with cars up 1.9% to make a profit, while oil and gas inventories fell 0.4%.
The market focus is on the Federal Reserve, which opens its two-day meeting on Tuesday, followed by a statement and briefing from Chairman Jerome Powell on Wednesday.
A hike in interest rates and a rebounding US economy have spotlighted the easy central bank policy, and market watchers have wondered when the Fed might consider phasing out that policy.
Later this week, the Bank of England will meet on Thursday, and the Bank of Japan will also begin its two-day policy meeting that day.
Asia-Pacific markets rose slightly higher on Tuesday after a relatively subdued start to global trading week as investors look ahead to the Fed meeting. US stock index futures were mixed in premarket trading on Tuesday after the Dow and S&P closed at record highs amid optimism about the economic reopening.
News about the coronavirus vaccine continues to be in the spotlight in Europe after Germany became the last country to suspend use of the AstraZeneca-University of Oxford vaccine on Monday over concerns about blood clots. The German government also said it was discontinuing its use as a precaution, with the vaccine regulator, the Paul Ehrlich Institute, calling for further investigation.
The World Health Organization, health experts and the vaccine maker have tried to downplay ongoing safety concerns and say there is currently no evidence to suggest a link between the injection and an increased risk of developing blood clots. The European Medicines Agency is conducting studies.
Largest movers
Tuesday’s win came from VW, RWE, Zalando and Greggs on Tuesday.
Volkswagen is aiming for an operating margin of 5% -6.5% this year and 7% -8% in the coming years in subsequent years as it looks at cost savings and an ambitious expansion in the electric vehicle market.
“Within the next 15 years, we will see aggregate industry sales. Electric cars are leading the way and software really becomes the industry’s main driver,” CEO Herbert Diess told CNBC on Tuesday.
Shares of the world’s second-largest automaker gained 4.5% in early trading, while German automotive battery maker Varta jumped 6.5% to lead the Stoxx 600.
Zalando and French telecom company Iliad both gained more than 5% after strong annual results.
At the bottom of the European blue chip index, German biotech company MorphoSys fell more than 11% after its earnings reporting.
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