European stocks continued to rally at the open on Wednesday as Asian property developer China Evergrande said it would make some interest payments and gambling shares found favour after a £16bn offer for Entain.
The pan-European STOXX 600 rose 0.5% in early deals. All major regional bourses were higher. Investors are waiting on comments later today from the US Federal Reserve for any sign of plans to taper asset purchases.
“The Fed is expected to reiterate its stance on a tapering of its bond buying programme, with the consensus still believing that December will most likely signal the firing of the starting gun,” said Richard Hunter, head of markets at interactive investor.
“However, with weaker employment numbers of late and the jobs market still almost six million shy of pre-pandemic levels, one of the Fed’s key requirements has not yet been met.”
“At the same time, a combination of supply chain issues and spikes in the Delta variant have tapped the brakes on the economic recovery, prompting downgrades of the outlook for this year. The additional complication of elevated inflation adds to the mix and, in this brittle environment, the comments will receive extra scrutiny.”
In equity news, Evergrande’s Frankfurt-listed shares surged 20% after the company, which owes $300bn, said it would make a coupon payment on its domestic bonds.
Entain jumped to the top of the Stoxx with a 7.6% rise after the UK gambling firm revealed a takeover proposal from Boston-based DraftKings.
Rival Flutter Entertainment gained as it reported that a legal dispute with the Commonwealth of Kentucky has now been settled in full, as it updated investors on its Australian division, Sportsbet.
Deutsche Post fell 2.3% after US delivery firm FedEx Corp cut its full-year forecast after labour shortages hit earnings and slowed packages shipments.
