European stocks edged higher on Thursday as traders awaited a widely expected European Central Bank rate hike, a day after the region's benchmarks posted their biggest selloff in two months. Brent crude held above $100 a barrel following attacks on shipping, keeping inflation risk in focus.
European equities opened higher on Thursday, clawing back part of Wednesday's steep drop as traders positioned for the European Central Bank's rate decision. Germany's DAX gained 0.1% and France's CAC 40 rose 0.2%, while the UK's FTSE held flat in early trading. Spain and Italy led the region, with the IBEX up 0.6% and the FTSE MIB climbing 0.5%.
Oil keeps inflation risk in the picture
European stocks tumbled 1.4% in the previous session after Brent crude surged above $100 a barrel for the first time since July, reviving inflation concerns. Brent stayed above that level on Thursday after Iran and the United States launched their largest wave of attacks on shipping since the six-month conflict began.
Among individual movers, Associated British Foods shares fell 8.6% after the company said Primark's like-for-like sales are expected to be down 3% in the fourth quarter ending September 12.
Central bank decisions stack up next week
The ECB is widely expected to raise its key interest rate by 25 basis points later Thursday, with markets also watching President Christine Lagarde's comments on oil prices and their interest rate implications. Across the Atlantic, S&P 500 futures rose 0.2% and Dow futures added 0.4%, while Nasdaq futures slipped 0.1%, with Treasury yields holding near multi-year highs.
The Federal Reserve and the Bank of Japan are both due to announce policy decisions next week, following tomorrow's US inflation data.
Sources: InvestingLive, Investing.com
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