European bourses advanced significantly on Wednesday after media reports announced Donald Trump as the winner of the US presidential election. Traders also considered the US Federal Reserve, which commenced a two-day meeting in Washington, with expectations of a 0.25% rate cut to be revealed on Thursday. Tech and retail stocks experienced gains, contrasting with underperformance seen in bank and oil sectors.
Investors kept an eye on Wall Street futures hinting towards positive, though volatile, closings overnight across Asian exchanges. Data released by Eurostat indicated a decline in the Eurozone producer price index and the broader European Union PPI, which dropped by 0.6% in September compared to August.
Year-on-year, the PPI fell by 3.4% in the Eurozone and 3.3% in the EU, primarily driven by decreasing energy costs. Mid-session, the pan-continental Stoxx Europe 600 Index rose by 0.8%. The Stoxx Europe 600 Technology Index matched this increase, while the Stoxx 600 Banks Index slipped down by 0.3%.
The Stoxx Europe 600 Oil and Gas Index remained unchanged, though the Stoxx 600 Europe Food and Beverage Index saw a slight uptick of 0.3%. In terms of national market performance, Germany's DAX index climbed by 0.3%, and the UK's FTSE 100 advanced by 0.9%. In Paris, the CAC 40 index increased by 0.7%. Meanwhile, yields on benchmark 10-year German bonds declined, now around 2.39%.
Front-month North Sea Brent crude-oil futures fell by 1.3%, settling at $74.52 per barrel. The Euro Stoxx 50 volatility index dropped by 14.9% to 16.90, suggesting below-average volatility expected in European stock markets over the next month, a favorable indicator. Readings exceeding 20 point to anticipated market turbulence, while those beneath that threshold indicate steadier movements..