European stocks were set to rise on Wednesday, bouncing back from two-week lows and tracking a rally on Wall Street spurred by a report which shifted investor expectations for the Federal Reserve’s policy statement due on Wednesday.

Financial spreadbetters expected Britain’s FTSE 100 to open 13 to 16 points higher, or up 0.2 per cent, Germany’s DAX to open 38 to 41 points higher, or up 0.4 per cent, and France’s CAC 40 to open 22 to 24 points higher, or up 0.5 per cent.

After early losses in New York on Tuesday, major indexes rallied, with traders citing a report in the Wall Street Journal as indicating the Fed could be less hawkish than markets have been expecting.

The Fed began its two-day policy meeting on Tuesday, and while it has said it does not expect to raise rates until 2015, recent strong economic data has led Fed officials to acknowledge they may need to move sooner than they previously anticipated. Recent talk that the Fed might turn hawkish had pushed up US Treasury yields.

French, UK stocks

French stocks will be in the spotlight after Prime Minister Manuel Valls headed off a backbench revolt against his government late on Tuesday, winning a confidence vote after promising to preserve France’s social model, while pushing pro-business reforms intended to boost economic growth.

UK equities will also be in focus after three different opinion polls showed Scottish supporters of staying in the United Kingdom are 4 percentage points ahead of secessionists with just a day to go before Scots vote in an independence referendum.

Related Topics
comment COMMENT NOW