Europe midday: Shares power ahead on Ukraine peace hopes, China stimulus
European stocks continued their surge at midday on Wednesday, driven by hopes that peace talks to end the Ukraine war were making positive progress as investors also eyed a meeting of the US Federal Reserve for an interest rate rise.
The pan-European Stoxx 600 index was up 2.7% with Germany's DAX up 3.3% and France's CAC 40 3.64% higher. Asian shares rebounded overnight from Tuesday’s sell-off, with Hong Kong’s Hang Seng surging 9%, as China’s Vice Premier Liu He said Beijing will roll out more measures to boost the Chinese economy as well as favourable policy steps for capital markets.
Ukrainian president Volodymyr Zelenskyy said there was room for compromise in talks with Russia ahead of a fresh round of discussions, despite more shelling by Moscow’s of Kyiv.
“The meetings continue, and, I am informed, the positions during the negotiations already sound more realistic. But time is still needed for the decisions to be in the interests of Ukraine,” Zelenskiy said in a video address early on Wednesday.
On the economic front, the focus is on the Federal Reserve meeting later today where an interest rate hike is expected.
“Should this fail to materialise, further volatility across European and the UK market should be expected. It’s also worth keeping in mind the Russian invasion of Ukraine means the frequency and extent of rate rises may not be as high as previously predicted,” said Hargreaves Lansdown analyst Sophie Lund-Yates.
“Of course, oil prices are still very much front and centre of the financial – and consumer – worlds’ minds. Prices rose for the first time in three days on Wednesday, with Brent crude reaching $102 a barrel.”
“Exactly where they’re going to land long-term is very much determined by demand. With fresh, albeit tentative, hope of constructive talks between Ukraine and Russia swirling, there is scope for some further heat to come out the oil price.”
In equity news, shares in cyber security firm Avast slumped 11.2% as the firm’s takeover by rival NortonLifeLock faced a competition probe.
Sweden-based private equity fund EQT jumped 9.93% after it said it had agreed to buy investment firm Baring Private Equity Asia in a deal worth €6.8bn.
Dutch tech investor Prosus, which has stake in China's Tencent, rebounded 21% after hitting all-time lows in the previous session.