Key facts
- European stocks traded near record highs, showing little change on Wednesday.
- The STOXX 600 index hovered near recent record highs.
- Rising oil prices, driven by Middle East shipping attacks and geopolitical tensions, contributed to market caution.
- Investors awaited U.S. CPI data and considered corporate earnings reports.
- The energy sector saw gains, while the automotive sector declined.
European shares traded largely subdued on Wednesday, hovering near recent record highs as investors balanced corporate earnings optimism with fresh geopolitical tensions and awaited crucial U.S. inflation data. The pan-European STOXX 600 index was little changed.
Rising oil prices, with Brent crude futures climbing, added to market caution following separate attacks on shipping in the Middle East and fading hopes for a resolution to the Iran conflict. Iran indicated the Strait of Hormuz would remain closed unless Washington met its conditions. Additional geopolitical concerns stemmed from North Korea firing a ballistic missile and Taiwan protesting China's planned naval drills.
The energy sector was the sole gainer among European sectors, rising 0.7%, while the automobiles and parts sub-index saw the largest decline, down 0.8%. Investors are also focused on upcoming U.S. CPI data, which could influence the Federal Reserve's next meeting, with markets pricing an even chance of a rate hike.
Corporate earnings remained a key focus. Warship manufacturer TKMS jumped 9.2% after raising its outlook for the second time in six months. Conversely, shares of Europe's largest travel company TUI fell 2.8% after its third-quarter operating profit missed expectations, impacted by weaker bookings and higher jet fuel costs. German potash and salt miner K+S gained 2.2% after raising its annual outlook for the second time this year.