European Stocks Close Higher On Optimism About Monetary Easing

(RTTNews) - European stocks closed higher on Wednesday amid rising optimism several central banks, including the Federal Reserve will consider easing their monetary policy, and even start cutting interest rates sometime early next year.

Data showing a lower-than-expected increase in US private employment reinforced bets that the Fed will start cutting rates soon.

Payroll processor ADP said private sector employment in the U.S. rose by 103,000 jobs in November after climbing by a downwardly revised 106,000 jobs in October. Economists had expected private sector employment to advance by 130,000 jobs compared to the addition of 113,000 jobs originally reported for the previous month.

The pan European Stoxx 600 gained 0.52%. The U.K.'s FTSE 100 advanced 0.34%, Germany's DAX surged 0.75% and France's CAC 40 climbed 0.66%, while Switzerland's SMI ended 0.34% up.

Among other markets in Europe, Belgium, Greece, Ireland, Netherlands, Poland, Portugal, Spain and Sweden ended higher. Norway edged up marginally.

Austria, Denmark, Finland, Iceland, Russia and Turkiye closed weak.

Shares of Germany-based TUI AG soared nearly 14% after the travel giant announced a potential move of its stock market listing from London to Frankfurt. The company also reported a 13% jump in fourth quarter earnings to 904 million euros.

Renault, WorldLine, Alstom, Stellantis, Volkswagen, Carnival, BT, Prudential, IAG, Fresnillo, Flutter Entertainment, Just Eat Takeway.com, St. James's Place, Croda International, RightMove, Experian and Sartorius gained 3 to 6%.

Unibail Rodamco, Legrand, Safran, Credit Agricole, Anglo American Plc, Ashtead Group, Pennon, Standard Chartered, 3i, Legal & General, Hargreaves Lansdown, Antofagasta, Easyjet, Infineon, Bayer, Daimler Truck Holding, BASF and Continental were among the other major gainers today.

Merck tumbled nearly 13% after the science and technology major said its two-Phase III EVOLUTION clinical trials of evobrutinib in Relapsing Multiple Sclerosis did not meet their primary endpoints.

British American Tobacco plunged more than 8%. The tobacco and nicotine giant scaled back its expectations for organic growth this year and announced a massive £25bn impairment charge.

Fresenius Medical Care and Puma lost about 1.4% and 1.3%, respectively. Teleperformance, TotalEnergies, Imperial Brands, Roytal Dutch Shell, Diageo and Carrefour also ended notably lower.

On the economic front, Germany's factory orders decreased for the first time in three months, mainly due to weaker demand for machinery and equipment, data from Destatis revealed.

Factory orders dropped 3.7% month-on-month in October, reversing the 0.7% increase in September. Meanwhile, economists had expected a 0.2% increase. Excluding large-scale orders, manufacturing orders posted an increase of 0.7%.

German construction sector deteriorated at the steepest pace in just over three-and-a-half years in November amid a sharp fall in activity across all segments, especially housing projects, survey results from S&P Global showed.

The HCOB construction purchasing managers' index dropped to 36.2 in November from 38.3 in October. Any score below 50 indicates contraction in the sector.

Euro area retail sales increased for the first time in four months in October, largely due to an increase in sales of non-food products, figures from Eurostat showed on Wednesday.

Retail trade advanced 0.1% month-on-month in October, in contrast to a 0.1% drop in September. Sales were expected to increase by 0.2%.

Data showed that retail sales in the EU27 slid 0.3% per month, taking the annual fall to 0.9% in October.

UK construction activity remained in contraction for the third straight month in November, led by another sharp fall in residential building activity, survey results from S&P Global showed on Wednesday.

The Chartered Institute of Procurement & Supply Construction Purchasing Managers' Index, or PMI, dropped to 45.5 in November from 45.6 in October. The score was expected to fall to 46.3.