European Stocks Close Higher As Investors Digest Economic Data, U.K.'s Spring Budget

(RTTNews) - European stocks closed higher on Wednesday with investors assessing U.K.'s spring budget, and Federal Reserve Chair Jerome Powell's congressional testimony.

Markets also digested a slew of regional economic data, and awaited the European Central Bank's monetary policy announcement, due on Thursday.

British Finance Minister Jeremy Hunt announced plans for permanent tax cuts due to slowing inflation. The Office for Budget Responsibility (OBR) predicts inflation to dip below the Bank of England's target in the coming months, and has revised upwards the nation's growth forecast.

The pan European Stoxx 600 gained 0.39%. The U.K.'s FTSE 100 advanced 0.43%, Germany's DAX edged up 0.1% and France's CAC 40 climbed 0.28%. Switzerland's SMI ended 0.72% up.

Among other markets in Europe, Austria, Belgium, Greece, Netherlands, Poland, Portugal, Russia, Spain and Sweden ended higher.

Denmark, Iceland and Turkiye closed weak, while Norway and Finland ended flat.

In the UK market, Convatec Group gained more than 5%. Anglo American Plc, Weir Holdings, Smith & Nephew, Endeavour Mining, LSE, Experian, Tesco, BP, Centrica, B&M European Value Retail, Royal Dutch Shell and Flutter Entertainment gained 1.5 to 3.4%.

Rentokil Initial, Lloyds Banking, Scottish Mortgage, Kingfisher, Rio Tinto, Land Securities, RS Group, IMI and Halma advanced 1 to 1.4%.

Fresnillo tumbled about 4%. Hikma Pharmaceuticals, Smurfit Kappa Group, Ocado Group, Reckitt Benckiser, Diageo, Coca-Cola, Standard Chartered, Antofagasta and Admiral lost 1 to 2.5%.

Legal & General ended more than 1% down after posting flat operating profit for 2023.

In the German market, Symrise rallied more than 6%. The maker of flavors and fragrances gained after its 2023 core profit beat estimates.

Zalando, Bayer and BASF gained 2.7 to 3.4%. BASF surged after the company said it is changing the name of two dispersions plants in China.

Infineon, Sartorius, Siemens Energy and SAP also ended notably higher.

Deutsche Post dropped more than 6% after a warning that earnings could remain relatively flat this year.

Fresenius Medical Care lost about 3.7%, while Vonovia, Fresenius, Volkswagen, Commerzbank and BMW lost 1.4 to 2.3%.

In Paris, Legrand, Renault, Alstom, TotalEnergies, Engie, Dassault Systemes, Stellantis and STMicroElectronics posted sharp to moderate gains.

WorldLine ended nearly 6% down. Thales ended lower by about 2.7%, while Pernod Ricard, Edenre, Teleperformance and Danone lost 1 to 1.6%.

Fed chair Powell told the House Financial Services Committee today that it will likely be appropriate for the Fed to begin lowering interest rates at "some point this year." However, he reiterated officials need "greater confidence" inflation is moving sustainably toward 2%.

The Fed Chief described the economic outlook as "uncertain" and said progress towards the Fed's 2% inflation objective is "not assured."

On the European economic front, data from Eurostat showed Eurozone retail sales rose marginally in January on food and auto fuel turnover, rising by 0.1% in the month, reversing a 0.6% fall in December.

The ifo Institute has downgraded Germany's growth projection for 2024 as higher interest rates and fiscal policies hurt economic activity. The institute trimmed growth outlook for this year to 0.2% from 0.9%, while the projection for 2025 was lifted to 1.5% from 1.3%.

A report from Destatis said Germany's exports posted a monthly growth of 6.3% in January after falling 4.5% in the previous month. This was far better than economists' forecast of 1.5% increase.

Imports advanced 3.6% on month, in contrast to the 6.7% decrease in December. Imports were expected to rise moderately by 1.8%.

The trade surplus rose to EUR 27.5 billion from EUR 23.3 billion in December. The expected surplus was EUR 21.5 billion.

On a yearly basis, exports gained 1.5% after easing 9.1% a month ago. At the same time, the annual decrease in imports slowed to 7.5% from 15.2% in December.

Germany's construction sector shrank sharply in February but the pace of decline slowed from the previous month, survey results from S&P Global showed. The construction Purchasing Manages' Index hit a five-month high of 39.1 in February, up from 36.3 in January.

Survey results from S&P Global showed the downturn in UK construction activity eased in February amid improved demand conditions. The Construction Purchasing Managers' Index, or PMI, rose to 49.7 in February from 48.8 in January. The score was expected to increase to 49.0.