On Wednesday European stocks traded higher, backed by growing expectations for additional easing measures by the European Central Bank. Investors awaited the release of euro zone inflation data due later in the trading session.
During European morning trade, the EURO STOXX 50 advanced 0.57%, France’s CAC 40 gained 0.67%, while Germany’s DAX 30 climbed 0.50%.
The euro zone was to release preliminary data on inflation later Wednesday and economists have forecast an annualized decline of 0.1%, which would be the first drop since 2009. Last week Mario Draghi, ECB President, said the risk of it not fulfilling its mandate of price stability is higher now than six months ago. The remarks indicated that the likelihood of full blown quantitative easing has increased ahead of the ECB’s meeting on January 22.
A decline in consumer prices would add to pressure on the ECB to step up measures to combat the threat of deflation in the region.
Earlier today, data showed that German retail sales rose rose 1.0% in November, beating expectations for a 0.1% uptick, after a revised 2.0% increase the previous month.
Financial stocks were broadly higher, as French lender Societe Generale climbed 0.90%, while Germany's Commerzbank and Deutsche Bank gained 0.43% and 1.11%.
Italy's Intesa Sanpaolo and Unicredit rose 0.35% and 0.95% respectively.
Spanish banks Banco Santander and BBVA rallied 1.22% and 1.59%.
In London, FTSE 100 advanced 0.66%, led by Sainsbury, up 3.39% after the supermarket chain said revenue at stores open at least a year fell less-than-expected in the 14 weeks ending January 3.
Financial stocks contributed to gains, as Lloyds Banking climbed 0.79% and Barclays jumped 0.94%, while the Royal Bank of Scotland and HSBC Holdings rallied 1% and 1.47% respectively.
Stocks were also mostly higher in the mining sector. Shares in Rio Tinto added 0.12% and Fresnillo rose 0.32%, while BHP Billiton gained 0.60%.
In reverse, EasyJet slipped 0.12%, erasing earlier gains posted after the discount carrier reported a 3.2% increase in December passengers.
Royal Dutch Shell saw shares slide 0.36% following reports the company agreed to pay compensation to thousands of residents of the Bodo community in Nigeria's Niger River delta region for two "highly regrettable" oil spills in 2008.
In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.34% rise, S&P 500 futures signaled a 0.38% gain, while the Nasdaq 100 futures indicated a 0.35% increase.
Later in the day, investors eye the U.S. report on ADP nonfarm payrolls, in addition to data on the trade balance. Moreover, the Fed was to publish the minutes of its most recent meeting.
