By Purvi Agarwal and Ragini Mathur
Dec 9 (Reuters) – European shares inched higher on Tuesday on the back of gains in financial and industrial stocks, while investor caution ahead of the U.S. Federal Reserve’s two-day policy meeting later in the day capped the advance.
The pan-European STOXX 600 was up 0.2% at 579.23 by 0920 GMT. Major regional benchmark indexes were mixed with Germany’s DAX up 0.5% and the one in France down 0.2%.
Insurers were the biggest gainers on the index, up 1.3%, while banks advanced 0.5%.
A 3.5% and 1.2% rise in Man Group and EQT respectively, after rating upgrades from J.P.Morgan lifted financial services shares 0.8%.
Industrial companies advanced 0.4%, with defence stocks leading the rise after Bloomberg News reported that German lawmakers are set to approve procurement contracts worth a record 52 billion euros next week. Rheinmetall, RENK and Hensoldt gained between 4% to 6%, with the broader index up 1.5%.
Meanwhile, markets are focused on a monthly U.S. jobs opening report later in the day. While the Fed is already widely expected to deliver a 25-basis-point cut on Wednesday, investors are keeping an eye for clues to the central bank’s post-December approach to monetary policy.
“It’s the biggest risk event of the week. It’s more about the detail… with regard to the dot plots, any changes to the projections, how many dissents,” said Daniela Hathorn, senior market analyst at Capital.com.
“With such a key event a day from now, it’s common that you see kind of this indecision creeping in and more of a wait-and-see approach.”
Rising expectations of U.S. rate cuts, after delayed economic data and dovish comments from some policymakers have lifted global markets in the last few weeks.
But European Central Bank policymaker Isabel Schnabel on Monday said the ECB’s next move could be a hike, pointing to a potential deviation in the path of the two central banks.
The hawkish comments sent 10-year euro zone borrowing costs to multi-month highs and German 30-year yields to over 14-year highs.
Among other stocks, Thyssenkrupp slumped 9.5% after the German conglomerate said it expects to swing to a net loss of up to 800 million euros ($931.04 million) in 2026.
British American Tobacco (BAT) was down 4.1%, the biggest weight on the STOXX 600, after the cigarette maker said it expects 2026 numbers to come in at the lower end of its mid-term targets.
Renewable energy companies Nordex and SMA Solar rose over 2% each, while Vestas and Oersted gained 2.8% and 3.3% respectively after a federal judge rejected U.S. President Donald Trump’s ban on new wind energy projects.
($1 = 0.8593 euros)
(Reporting by Purvi Agarwal and Ragini Mathur in Bengaluru; Editing by Rashmi Aich and Harikrishnan Nair)
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