European shares rise, led by auto and chemical stocks
The pan-European STOXX 600 index edged up 0.2% to 629.51 points, bringing it around 1% away from a record high hit in February
European shares edged up in the early hours on Wednesday, trading close to an all-time high, driven by auto and chemical stocks, while investors kept a wary eye on escalating tensions in the Middle East.
The pan-European STOXX 600 index edged up 0.2% to 629.51 points by 0829 GMT, bringing it around 1% away from a record high hit in February.
Automobiles was among the top gainers across sectors, gaining 2.6%, with Volvo Cars climbing 7%.
The sector was also lifted after data showed that registrations in the European Union, Britain, and the European Free Trade Association increased 7% in April, taking the total for January through April 4.8% above a year earlier.
Chemical stocks also added more than 1.3% as AkzoNobel rose 16% after the paint maker rejected a joint cash takeover offer of €73 (£63.21) per share from rivals Nippon Paint and Sherwin-Williams.
Meanwhile, escalating tensions in the Middle East kept gains in check, as Iran called recent U.S. strikes a violation of the ceasefire.
Markets are sort of just putting it to the back of their mind, said Michael Hewson, a senior financial analyst at iFOREX Europe.
The new status quo is essentially continued uncertainty about a ceasefire, and until such times as things deteriorate really badly, they’re going to work on the basis that there’s going to be a resolution at some point, he said.
Brent crude prices shed 2%, but at $97 a barrel, they kept inflation worries at the top of investors’ minds as markets priced in at least two 25-basis-point interest rate hikes by the European Central Bank this year.
Dutch central bank chief Olaf Sleijpen said that the persistence of energy price shocks will be a key factor guiding the ECB’s next policy decision.