(Bloomberg) -- European stocks ended Wednesday at the highest level since mid-July, as investors awaited the high-stakes earnings report from Nvidia Corp.
The Stoxx Europe 600 Index was up 0.3% by the close. Chemical and insurance sectors outperformed, while miners were the biggest laggards. GSK Plc gained as the Delaware Supreme Court decided to review a lower state court decision related to Zantac litigation, which looked at claims that the firm’s heartburn medicine causes cancer.
European stocks have recouped August’s declines on bets that the Fed is preparing to cut interest rates at a time when the economy can avoid a recession. The Stoxx 600 is now less than 1% below its May record high. All eyes this week are on Nvidia’s results — due after the US market close Wednesday — and inflation data.
“It’s hard to think of a more eagerly awaited set of corporate earnings than Nvidia’s, and there is a real sense of apprehension,” said Neil Birrell, chief investment officer at Premier Miton Investors. “There’s little doubt that equities will be driven by the tech sector, for good or for bad, in the next few days, depending on what Nvidia says. It’s the only game in town at the moment.”
The European equities gauge is also facing tough seasonal trends. The index has dropped about 1.9% on average in September in the past five years, the biggest decline of any month.
Barclays Plc strategists said European stocks continue to be sold by US investors amid weaker macro trends and lingering political uncertainty. “Furthermore, Europe’s earnings fundamentals remain lackluster,” the team led by Emmanuel Cau wrote in a note.
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