European stock markets largely edged higher in cautious trading Wednesday ahead of a crucial Federal Reserve meeting, while political turmoil weighed on U.K. markets.
At 3:50 AM ET (0850 GMT), the DAX in Germany traded 0.3% higher, the CAC 40 in France rose 0.7%, while the U.K.’s FTSE 100 dropped 0.2%.
The U.S. Federal Reserve concludes its latest policy-setting meeting later Wednesday, announcing its decisions at 2 PM ET (1900 GMT), with Chairman Jerome Powell's press conference starting half an hour later. He's expected to announce an accelerated end to the Fed's bond-buying program, taking a step toward interest-rate increases to bring down
consumer prices that are rising at the fastest rate in almost 40 years.
Returning to Europe, Inditex (MC:ITX) stock fell 2.4% after the world's biggest fashion retailer, and owner of the Zara stores, posted a net profit of 2.5 billion euros ($2.82 billion) in the first nine months of its fiscal year, still below the 2.7 billion euros reported in the same period in 2019.
H & M Hennes & Mauritz (ST:HMb) stock fell 2.1% after the world's second-biggest fashion retailer reported an increase in net sales in September through November of 8%, in line with expectations. At the end of the quarter around 115 stores were temporarily closed due to restrictions, against around 100 at the start of the quarter.
On the flip side, Generali (MI:GASI) stock rose 1.4% after the Italian insurer announced plans to return up to 6.1 billion euros ($7 billion) in dividends and buybacks to shareholders.
Elsewhere, U.K. Prime Minister Boris Johnson suffered a severe blow to his authority that raised more questions about his leadership. Almost 100 of his party's lawmakers voted against new coronavirus restrictions, in a vote late on Tuesday.
Additionally, U.K. consumer prices soared 5.1% on the year in November, a new 10-year high and more than double the Bank of England’s target, according to data released Wednesday.
The U.K. central bank is expected to keep its rates on hold on Thursday despite this rise in inflation, as it reacts with caution to the spread of Omicron-variant Covid-19 in the country.
Oil prices fell Wednesday, for the third day in a row, on concerns the Omicron-driven rise in coronavirus cases will see demand growth slip below rises in supply next year.
The International Energy Agency said on Tuesday a surge in Covid-19 cases will dent global demand for oil at the same time that crude output is set to increase, especially in the United States.
Adding to the bearish tone, data from the industry body, American Petroleum Institute, showed that U.S. crude inventories fell by 815,000 barrels last week, a smaller decline than expected, if corroborated by U.S. Energy Information Administration later Wednesday.
By 3:50 AM ET, U.S. crude futures traded 0.7% lower at $70.25 a barrel, while the Brent contract fell 0.5% to $73.37. Both contracts have fallen more than 3% this week.
Additionally, gold futures fell 0.2% to $1,768.50/oz, while EUR/USD traded 0.1% higher at 1.1271.