KEY POINTS
- Market focus is on the Federal Reserve which kicks off its two-day meeting on Tuesday, followed by a statement and briefing from Chairman Jerome Powell on Wednesday.
- The Bank of England is due to meet on Thursday and the Bank of Japan will also begin its two-day policy meeting that day.
European stocks advanced Tuesday morning as market attention focuses on the global economic recovery and the latest meeting of the U.S. Federal Reserve.
The pan-European Stoxx 600 added 0.5% by late morning, with autos climbing 1.6% to lead gains while basic resources dropped 1.1%.
Market focus is on the Federal Reserve which kicks off its two-day meeting on Tuesday, followed by a statement and briefing from Chairman Jerome Powell on Wednesday.
A surge in interest rates and a rebounding U.S. economy has put the central bank’s easy policies in the spotlight and market watchers have questioned when the Fed may consider unwinding those policies.
Later this week, the Bank of England is due to meet on Thursday and the Bank of Japan will also begin its two-day policy meeting that day.
Asia-Pacific markets edged higher on Tuesday, following a relatively subdued start to the global trading week as investors look ahead to the Fed meeting. U.S. stock index futures were mixed in premarket trading on Tuesday, after the Dow and S&P closed at record highs amid optimism over the economic reopening.
Coronavirus vaccine news remains in focus in Europe after Germany became the latest country Monday to suspend use of the AstraZeneca-University of Oxford vaccine over blood clot concerns. The German government also said it was suspending its use as a precaution, with the vaccine regulator, the Paul Ehrlich Institute, calling for further investigations.
The World Health Organization, health experts and the vaccine maker have sought to downplay ongoing safety concerns, saying there is no evidence currently to suggest a link between the shot and an increased risk of developing blood clots. The European Medicines Agency is carrying out investigations.
Biggest movers
Earnings on Tuesday came from VW, RWE, Zalando and Greggs on Tuesday.
Volkswagen is targeting 5%-6.5% operating margin this year and 7%-8% in the ensuing years, as it eyes cost cuts and an ambitious expansion into the electric vehicle market.
“Within the next 15 years we will see a total turnover of the industry. Electric cars are taking the lead and then software really becomes the core driver of the industry,” CEO Herbert Diess told CNBC on Tuesday.
Shares of the world’s second-largest automaker gained 5.6% by late morning. German car battery manufacturer Varta soared more than 11% to lead the Stoxx 600 after announcing that it will start producing battery cells for electromobility.
Zalando and French telecoms company Iliad gained 4.4% and 5.7% respectively after strong full-year results.
At the bottom of the European blue chip index, German biotech firm MorphoSys dropped 8.8% after its full-year earnings report.
