Key facts
- European shares recovered on Wednesday, with the STOXX 600 index up 0.4%.
- A pause in the oil price rally supported the recovery in European equities.
- Markets are anticipating a 93% chance of a 25-basis-point interest rate hike from the U.S. Federal Reserve.
- Rising inflation concerns, partly due to the Iran conflict, have influenced rate expectations.
- Babcock International retained its annual forecast, with shares rising 2.5%.
- Barratt Redrow trimmed its fiscal 2027 home completions target, but its shares rose 5.1%.
European shares recovered on Wednesday, reversing some of the previous day's losses that had pushed the STOXX 600 index to a three-month low. The rebound was attributed to a pause in the rally of oil prices, which had previously fueled inflation concerns and weighed on investor sentiment.
Investors are now focused on the U.S. Federal Reserve's monetary policy decision later in the day. Markets are pricing in a high probability of a 25-basis-point interest rate hike, with recent inflation data, partly influenced by the Iran conflict, prompting a reassessment of rate expectations.
Among individual companies, Babcock International maintained its annual forecast, leading to a 2.5% rise in its shares. Barratt Redrow saw its shares climb 5.1% despite trimming its home completions target for fiscal 2027 due to planning delays and fewer sales outlet openings.