BERLIN, Nov 14 — European shares edged higher today, as media stocks were boosted by Britain’s Informa, although caution prevailed after a top Federal Reserve policymaker warned that the US central bank would not “soften” its fight against inflation.
The pan-European STOXX 600 index was up 0.2 per cent by 0908 GMT, hovering near 11-week highs after recording its biggest weekly gain in nearly eight months on Friday.
British events organiser Informa Plc jumped 5.0 per cent after it raised its full-year earnings outlook, boosting the European media sector index by 0.8 per cent. Pearson Plc and German ticketing company CTS Eventim rose over 1 per cent each.
Still, the broader index was trading in a narrower-than-usual two-points range.
The caution came after Fed Governor Christopher Waller said yesterday that markets should now pay attention to the “endpoint” of interest rate hikes, not the pace of each move, and that the endpoint was likely still “a ways off”.
“The Fed is trying to communicate to markets that it isn’t going to pivot and is going to continue with this two-way sort of communication of slowing the pace of rate hikes but that doesn’t necessarily mean it will get to a lower endpoint,” said Giles Coghlan, chief market analyst at HYCM in London.
Readings on US inflation and another employment report will be watched before the Fed’s next policy meeting in December.
The STOXX 600 has fallen 11.2 per cent so far this year, less than the S&P 500 index’s 16.2 per cent fall. But even at discounted levels, analysts note that European stocks are not as attractive as their US counterparts.
“A war in Europe (Russia-Ukraine) is never good for business. So, if you’ve got that perennial risk then I don’t think it offers value, especially heading into winter it is even more uncertain,” Coghlan noted.
Eurozone data has also painted a gloomy picture for the economy, with the European Central Bank sticking to rapid rate hikes to battle inflation even at the risk of tipping the bloc into a recession.
Among stocks, Roche Holding AG slid 3.9 per cent after its Alzheimer’s drug candidate could not be shown to markedly slow dementia progression in two drug trials.
Military equipment manufacturer Rheinmetall rose 3.1 per cent after the German company yesterday agreed to buy Spanish explosives and ammunition maker Expal Systems for an enterprise value of €1.2 billion (RM5.6 billion).
The basic resources index rose 0.6 per cent as copper prices stayed near five-month highs amid supportive measures from the Chinese government for its ailing property sector. — Reuters
