European stocks were a touch higher overall in early trade on Wednesday following an upbeat session on Wall Street and as worries about gas supplies eased, but gains were muted ahead of an address by Italian Prime Minister Mario Draghi.
At 0855 BST, the benchmark Stoxx 600 index was up 0.1%, France’s CAC 40 was 0.2% higher and Germany’s DAX was flat.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said fears of a damaging US recession have receded a little in the rear-view mirror, with Wall Street closing at a three-week high following some more upbeat earnings report.
“The relief rally was prompted by a raft of higher profits from companies across a range of sectors including toy manufacturer Hasbro and oilfield services provider Halliburton. Netflix provided some after-hours cheer, rising by 8% as fewer subscribers than expected ditched the streaming giant, but with 1 million customers signing out, it’s clear the company has its work cut out in developing new content to lure them back in and grow its base elsewhere.”
Sentiment was also lifted following a Reuters report that Russian gas flows via the Nord Stream 1 pipeline were expected to restart on time on Thursday after the completion of scheduled maintenance. This “has helped ease immediate fears about a fresh energy shock with European gas prices dipping back slightly, but nations are still scrambling to ensure gas reserves are filled before a highly uncertain winter approaches,” Streeter said.
However, Rabobank said the major event of the day will be Italian PM Draghi addressing the Senate. Draghi is expected to formalise his intention to resign.
Investors were also looking ahead to the latest policy announcement from the European Central Bank on Thursday, following reports that policymakers would discuss whether to increase interest rates by a bigger-than-expected 50 basis points to tackle inflation.
In corporate news, chipmaker ASML fell as it cut its sales growth guidance for the year.
