European markets turn positive following Fed’s surprise cut
European markets traded slightly higher Wednesday following the U.S. Federal Reserve’s surprise rate cut on Tuesday.
The pan-European Stoxx 600 climbed 0.5% in early deals, basic resources adding 2.1% to lead gains while travel and leisure stocks fell 0.5% as most sectors and major bourses entered positive territory.
Global markets will be continuing to react to the U.S. Federal Reserve announcing an emergency 50 basis point cut to interest rates on Tuesday. Europe’s Stoxx 600 initially rose more than 3% on the news, but later pared gains to close 1.2% higher. In the U.S., stocks also initially rose but then fell sharply in volatile trading.
British construction company Hammerson fell 4.3% in early trade while German cash and carry group Metro slipped 6.6% to the bottom of the Stoxx 600.
British life insurer Legal & General reported a 2019 full-year profit beat before the bell, but its shares slid 3.1% at the start of trading.
There were no substantial gains early in the session, though Italy’s Exor climbed 3.3% after signing a memorandum of understanding to sell its Bermuda-based reinsurer PartnerRe to France’s Covea.