European Stocks Higher; BT Group Struggles Over Investment Worries

© Reuters.

By Peter Nurse 

Investing.com - European stock markets edged higher Thursday, with investors reacting cautiously as the minutes from the Federal Reserve's last meeting pointed to further aggressive tightening ahead.

By 3:55 AM ET (0755 GMT), the DAX in Germany traded 0.6% higher, the CAC 40 in France rose 0.7%, and the U.K.’s FTSE 100 climbed 0.2%.

The minutes from the Fed's May 3-4 meeting, released on Wednesday, showed that all policymakers supported the central bank’s rate increase of 50 basis points, the first of that size in more than 20 years, and most felt that further hikes of that size would "likely be appropriate" in June and July.

The minutes also offered up the possibility of a pause in rate hikes, after the June and July increases, something that Atlanta Federal Reserve President Raphael Bostic suggested earlier in the week.

Still, sentiment remains fragile within Europe amid persistent concerns over global growth as a number of central banks seek to combat soaring inflation, exacerbated by the ongoing war in Ukraine, by tightening monetary policy.

European Central Bank President Christine Lagarde said this week that the ECB's negative deposit rate should start rising in July and could be at zero or "slightly above" by the end of September before rising further "towards the neutral rate".

The main economic data releases Thursday come from the U.S., with quarterly GDP growth data as well as weekly jobless claims likely to be studied for signs the U.S. economy is starting to cool.

In corporate news, BT Group (LON:BT) stock fell 4% after the U.K. telecoms group said the government will take a closer look at the investment in it by the Altice company of French businessman Patrick Drahi.

HSBC (LON:HSBA) stock fell 0.5% after Bloomberg reported that the U.K.-based bank is considering an initial public offering of its Indonesian business.

The tech sector is also in focus after U.S. chip designer Nvidia (NASDAQ:NVDA) forecast late Wednesday that its sales of video game chips would decline in the current quarter, citing supply-chain issues resulting from China's COVID-19 lockdowns.

Oil prices edged higher Thursday, helped by a bigger-than-expected drawdown in U.S. crude inventories last week of one million barrels, an illustration of a tight global market.

The market remains focused on whether the European Union can agree to an embargo on Russian oil in retaliation for the invasion of Ukraine. 

European Council President Charles Michel on Wednesday said he is confident that unanimous agreement can be reached before the council's next meeting on May 30, but Hungary remains a stumbling block.

By 3:55 AM ET, U.S. crude futures traded 0.9% higher at $111.28 a barrel, while the Brent contract rose 0.6% to $111.78. 

Additionally, gold futures traded largely unchanged at $1,846.03/oz, while EUR/USD traded 0.1% higher at 1.0687.