Europe close: Stocks extend gains after solid start on Wall Street

(Sharecast News) - Europe's stock markets built on gains in afternoon trade as weaker-than-expected US economic data raised hopes that the Federal Reserve might soon call time on its monetary-tightening cycle. "It's been a solid start to the month for European markets with gains across the board as weaker economic data, and a slide in yields raises the prospect that central banks may well be done when it comes to further rate hikes," said analyst Michael Hewson from CMC Markets.

"Nonetheless after such a poor October performance for stock markets more broadly, what we may be seeing here is nothing more than a relief rally, although it's no less welcome for that."

The Stoxx 600 finished 0.7% higher at 436.57, rising for the third straight day after closing at a 10-month low of 429.58 on Friday. Gains were extended on Tuesday after Eurozone inflation eased more than expected, spurring optimism that the European Central Bank may cut interest rates sooner than anticipated next year.

US markets opened strongly on Wednesday after ADP revealed that private-sector employers added fewer-than-expected jobs in October, while the ISM survey showed that the American manufacturing industry contracted more than forecast.

The Treasury Department, meanwhile announced it would issue a higher amount of short-term debt this month, causing US 10-year bond yields to slide, touching an intraday low of 4.773% - down 16.1 points on the previous close.

The Federal Open Market Committee concludes its two-day policy decision meeting at 1800 CET, and while the central bank is widely expected to keep rates unchanged, investors will be listening closely to chair Jerome Powell's press conference.

Pharma stocks in focus

GSK initially rallied after the drug maker lifted its full-year profit outlook, but shares fell into the red before midday and finished down over 2%. The UK-listed firm now expects turnover to increase by 12% to 13%, up from previous guidance of 8% to 10%, and adjusted operating profit growth of 13% to 15%, up from 11% to 13%. However, market chatter was blaming the underperformance of its Shingrix vaccine for the fall in the share price.

In Paris, biopharmaceutical group Cellectis saw shares surge 192% after sector giant AstraZeneca announced it would acquire a 44% stake in the company to access its gene-editing technologies and manufacturing capabilities. AstraZeneca finished up 1%.

Swedish building company Skanska tanked 13% after missing forecasts with a 66% drop in third-quarter operating income.

UK high street retailer Next rose 4% after boosting its full-year guidance as third-quarter trading beat internal expectations.