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(Alliance News) - Stock prices in Europe closed higher on Wednesday, thanks to the more doveish discourse from the European Central Bank and US Federal Reserve.
The FTSE 100 index closed up 25.54 points, 0.3%, at 7,515.38. The FTSE 250 ended up 179.20 points, 1.0%, at 18,666.73, and the AIM All-Share closed up 1.44 points, 0.2%, at 718.12.
The Cboe UK 100 ended up 0.6% at 751.85, the Cboe UK 250 closed up 1.1% at 16,183.77, and the Cboe Small Companies ended up 2.8% at 13,823.03.
In European equities on Wednesday, the CAC 40 in Paris ended up 0.8%, while the DAX 40 in Frankfurt ended up 0.9%. The DAX reached yet another record high.
Prompting up stocks in Europe were hopes that the European Central Bank is done with interest rate hikes.
Isabel Schnabel, once one of the European Central Bank's more hawkish voices, told Reuters that the central bank can take further hikes off the table. Roughly a month ago, she said another hike may have been an option.
City Index and Forex.com Fawad Razaqzada said: "The German index was at it again on Wednesday, when it reached unchartered territories above July's peak of 16,532. These moves appear to have been triggered by growing belief that the ECB will soon cut interest rates, having concluded the rate-hiking cycle."
A similar doveish rhetoric was issued in the US. Notably, analysts were discussing the prospects of US interest rate cuts after US job openings came in below market estimates.
The US labour market added slightly fewer jobs than expected last month, according to a tracker from payroll processing firm ADP.
ADP said sector employment increased by 103,000 jobs in November, easing from a 113,000 rise in October and falling short of the FXStreet cited consensus of 130,000.
The latest nonfarm payrolls report is on Friday, the ADP reading acts as a precursor.
Then, the Fed will make its interest rate decision on Wednesday next week, followed by the ECB a day later.
Stocks in New York were lower at the London equities close, with the DJIA and the S&P 500 index both up 0.2%, whilst the Nasdaq Composite edged up 0.3%.
The pound was quoted at USD1.2601 at the London equities close Wednesday, lower compared to USD1.2613 at the close on Tuesday. The euro stood at USD1.0796 at the European equities close Wednesday, down against USD1.0809 at the same time on Tuesday. Against the yen, the dollar was trading at JPY147.17, up compared to JPY147.10 late Tuesday.
Germany's DAX 40 shrugged off a hefty 13% share price slide for pharmaceutical company Merck KGaA.
The firm late Tuesday said evobrutinib did not meet primary endpoint in trials on its effectiveness in sufferers of relapsing multiple sclerosis.
In London's FTSE 100, British American Tobacco was the worst performer on Wednesday, closing down 8.4%.
BAT said it will take a GBP25 billion hit this year in a move that left investors disappointed.
The London-based maker of tobacco and other nicotine products is gearing up to transition from traditional combustible cigarettes to new generation products like vaping. But it faces stiff competition from illicit products as it scrambles to gain market share.
AJ Bell investment director Russ Mould said the impairment would naturally have a negative impact on near-term financial results and so the share price has fallen once again.
"That's hardly what you would expect from a FTSE 100 company deemed to be defensive due to the addictive nature of its products," Mould said.
Diageo lost 1.4%, after UBS cut its stock to 'sell' from 'neutral'.
Diageo's premium valuation is at risk in the near term, according to UBS, who downgraded the London-based brewer and distiller.
UBS said it thinks Diageo's shares, which it says trades at a 12% premium to European staples and Pernod on estimated financial 2024 price-to-earnings ratio, is at risk of de-rating until Diageo's US Spirits growth accelerates to mid-single-digits and until management can draw a line under Latin America destocking.
Shell and BP tracked lower as oil prices fell. They were down 1.4% and 1.3% respectively.
Brent oil was quoted at USD75.14 a barrel at the London equities close Wednesday from USD78.49 late Tuesday.
In the FTSE 250, TUI shares soared 15%.
The Hannover, Germany-based tour operator said it swung to an EUR551 million pretax profit in the financial year that ended on September 30, following an EUR146 million loss the prior year. Revenue jumped 25% to EUR20.67 billion from EUR16.55 billion.
The strong full-year results, Tui said, were supported by continued growth in the fourth quarter across its Holiday Experiences segments alongside continued operational improvements in its Markets & Airlines division, where higher prices supported ongoing positive momentum in Winter bookings.
Paragon Group rose 8.4%.
The Solihull, West Midlands-based mortgage and loan provider reported total operating income of GBP466.0 million for the year ended September 30, up 19% from GBP393.0 million.
Pretax profit declined by 52% to GBP199.9 million from GBP417.9 million. Its bottom line was hurt by GBP77.7 million worth of fair value losses, compared to GBP191.9 million worth of gains a year prior. On an underlying basis, profit surged 25% to GBP277.6 million.
Paragon lifted its total dividend by 31% to 37.4 pence from 28.6p. It lifted its final dividend by 38% to 26.4p from 19.2p. It also announced a further GBP50.0 million share buyback for financial 2024.
Amongst London's small-caps, Ten Entertainment rose 32%.
The ten pin bowling operator agreed to a GBP287 million takeover from a vehicle indirectly owned by investment funds advised by Trive Capital Partners. Neon Buyer will pay 412.5 pence per Ten Entertainment share, a 33% premium to its 310p closing price on Tuesday.
Gold was quoted at USD2,026.89 an ounce at the London equities close Wednesday, higher against USD2,018.22 at the close on Tuesday.
In Thursday's UK corporate calendar, there will be a trading statement from Balfour Beatty. There will also be half year results from DS Smith, Frasers and Watches of Switzerland.
The economic calendar for Thursday has an EU gross domestic product reading at 1000 GMT. Before that, at 0700 GMT, there will be the UK Halifax house price index.
Also on Thursday, the EU-China summit begins. It will conclude on Friday.
By Sophie Rose, Alliance News reporter
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