By Peter Nurse
Investing.com - European stock markets pushed higher Wednesday, helped by gains in the banking sector, but trading ranges have been tight ahead of the conclusion of the latest policy meeting of the Federal Reserve.
At 4:00 AM ET (0800 GMT), the DAX in Germany traded 0.7% higher, France's CAC 40 rose 0.8%, while the U.K.'s FTSE index was up 0.6%.
These gains are continuing the positive tone of late, largely based on optimism over a global recovery from the coronavirus crisis, as well as coordinated monetary and fiscal stimulus from central banks and governments.
The European Central Bank is now looking at a scheme to cope with potentially hundreds of billions of euros of unpaid loans in the wake of the coronavirus outbreak, Reuters reported.
The project is aimed at shielding commercial banks from staggering amounts of debt that is considered unlikely to be repaid, particularly if rising unemployment chokes off the income needed to do so.
The banking sector responded positively to this, with Deutsche Bank (DE:DBKGn) up 2.7%, Credit Agricole (PA:CAGR) up 2.6% and Santander (MC:SAN) gaining 2.2%.
Earlier Wednesday, the French government said it is considering whether to end all emergency health measures imposed to tackle the COVID-19 pandemic on July 10.
This comes as the country’s industrial production slumped by 20% in April, following a drop of 16% the previous month.
Investors will also be keeping a keen eye on the Federal Reserve as the U.S. central bank concludes its policy meeting later in the day.
While no major policy announcements are expected, investors will scrutinize its remarks on the health of the economy, the world’s largest, particularly after the recent upturn in jobs numbers.
In corporate news, Inditex (MC:ITX), the Spanish fashion giant, said Wednesday that it swung to a first-quarter loss and recorded a big sales decline, citing the impact of the coronavirus.
Oil prices sold off Wednesday, weighed by the American Petroleum Institute’s surprise estimate of an 8.4-million-barrel build for the week ended June 5 late Tuesday, prompting renewed fears of a supply glut.
Investors will now look closely at the Energy Information Administration’s prediction, due later in the day.
At 2:00 AM ET, U.S. crude futures traded 2.3% lower at $38.05 a barrel. The international benchmark Brent contract fell 1.9% to $40.40.
Elsewhere, gold futures rose 0.2% to $1,725.80/oz, while EUR/USD traded at 1.1362, up 0.2%.