European stock markets saw modest gains on Wednesday as investors monitored developments in U.S. trade policy and the U.K. economic outlook ahead of Chancellor Rachel Reeves’ Spring Statement.
Market Performance at 08:02 GMT:
- DAX (Germany): +0.4%
- CAC 40 (France): +0.2%
- FTSE 100 (U.K.): +0.4%
Key Market Drivers:
1. Relief Rally Continues Amid Trade Tariff Speculation
- Optimism over a softer U.S. tariff stance has driven recent gains in global stocks, but uncertainty remains ahead of the April 2 deadline.
- President Trump, in an interview with Newsmax, hinted at possible exemptions but cautioned that he didn’t want “too many exceptions.”
2. U.K. Fiscal Policy in Focus
- Chancellor Rachel Reeves’ Spring Statement is expected to detail further spending cuts to address the budget shortfall caused by rising borrowing costs.
- £2.2 billion in additional defence spending is anticipated, aligning with Europe’s heightened focus on regional security.
- Reeves received a slight boost as U.K. inflation cooled to 2.8% in February, down from 3.0% the previous month.
3. Corporate Updates:
- Vistry Group (LON:VTYV): The British homebuilder reported a sharp drop in full-year profits, reflecting challenges in the housing market.
- Wacker Neuson (ETR:WACGn): The German construction equipment maker saw a steep revenue decline in 2024 due to weak demand in construction and agriculture and high dealer inventories.
Outlook:
- Investors remain cautious as they await further clarity on trade tariffs and U.K. fiscal measures.
- The Spring Statement could shape market sentiment, particularly if Reeves announces deeper spending cuts than anticipated.