European stocks nudge higher as Fed cools inflation fears

European stocks nudge higher as Fed cools inflation fears
# 26 May 2021 13:47 (UTC +04:00)

European stocks were modestly higher on Wednesday after U.S. Federal Reserve officials reiterated their dovish monetary policy stance in the face of investor concerns over rising inflation, APA reports citing CNBC.

The pan-European Stoxx 600 climbed 0.4% in early trade, with travel and leisure stocks adding 1.2% to lead gains as almost all sectors and major bourses entered positive territory.

The cautious optimism in Europe follows similar sentiment for markets elsewhere on Tuesday and overnight. Stocks in Asia-Pacific were mostly higher in Wednesday afternoon trade, with multiple markets in Southeast Asia (in Indonesia, Singapore and Thailand) closed for a holiday.

U.S. stock futures also advanced in early premarket trade on Wednesday after the market rally stalled Tuesday, with major indexes ending the regular session slightly lower.

Investors are awaiting a speech from Federal Reserve Vice Chair Randal Quarles on Wednesday as some concerns surrounding inflation and potential tapering continue to linger.

On Tuesday, Fed Vice Chair Richard Clarida said the central bank would be able to manage an overshoot in inflation without derailing the country’s economic recovery, while San Francisco Federal Reserve President Mary Daly told CNBC that while the recovery so far is encouraging, it is “way too early” to tighten policy.

Attention on cryptocurrencies also remains with China showing its intention to continue a four-year crackdown on bitcoin trading and other cryptocurrency-related activities.

China’s Inner Mongolia region has proposed punishments for companies and individuals involved in digital currency mining as it looks to further crack down on the practice.

The move comes after Chinese Vice Premier Liu He said last week in a statement that it is necessary to “crack down on Bitcoin mining and trading behavior” to prevent the “transmission of individual risks to the social field.”

Earnings in Europe came from Marks and Spencer and British Land while HelloFresh holds an AGM.