European stocks inched higher on Thursday ahead of a highly-awaited European Central Bank meeting, with multinational British companies getting a boost from floundering negotiations on a U.K.-European Union trade deal.
The Stoxx Europe 600 SXXP, +0.03% edged up, and the German DAX DAX, +0.11% and French CAC 40 PX1, +0.37% sported small advances.
The U.K. FTSE 100 UKX, +0.39% climbed 0.5%, as exporters got a boost from the drop in the pound GBPUSD, -0.68%. The yield on the 10-year gilt TMBMKGB-10Y, 0.220% also fell. A “lively” dinner of scallops and steamed turbot between U.K. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen concluded with an agreement to end talks on Sunday, though U.K. foreign secretary Dominic Raab already said he couldn’t rule out an extension.
The European Commission on Thursday proposed contingency measures if no deal is agreed, including a one-year fisheries agreement.
Negotiations on a U.S. stimulus bill continue, with hangups including whether to give aid to state and local governments, extend jobless benefits, provide stimulus checks, and provide legal immunity for businesses facing lawsuits over the spread of coronavirus.
The European Central Bank is meeting with expectations of more stimulus to aid the eurozone economy that has been hurt by a second wave of lockdowns. Expectations include a €500 billion increase to the ECB’s Pandemic Emergency Purchase Programme, though analysts at Bank of America say the central bank will move to an open-ended plan.
“The spotlight will fall on the European Central Bank today, which is widely expected to deliver another easing package of around €500bn, likely complemented by more ultra-generous loans to banks. The bad news for the ECB is that this package has already been well telegraphed and priced in, and yet the trade-weighted euro has continued to race higher,” said Marios Hadjikyriacos, investment analyst at XM.
U.S. stocks, particularly in the tech sector COMP, -1.94%, ended lower on Wednesday after a nationwide antitrust lawsuit was brought against social media giant Facebook FB, -1.93% that seeks the separation of its Instagram and WhatsApp units. Stock futures ES00, +0.17% drifted ahead of the ECB meeting, with the first day of trade of vacation rental marketplace Airbnb ABNB, , and the Food and Drug Administration meeting on the COVID-19 vaccine from U.S. drugmaker Pfizer PFE, -1.67% and its German partner BioNTech BNTX, -4.14% also in the spotlight.
The coronavirus pandemic continues to spread, with the U.S. on Wednesday suffering a record 3,054 deaths, which is more Americans than died during the Sept. 11, 2001, terrorist attacks. Confirmed cases in Europe continue to drop, though they still remain elevated, according to the European Centre for Disease Prevention and Control.
Of stocks on the move, food delivery group Ocado OCDO, -5.12% dropped 6%. It hiked its full-year earnings before interest, taxes, depreciation and amortization guidance to more than £70 million from a previous estimate of £60 million. The stock has nonetheless surged 84% over the last 12 months.
HelloFresh HFG, +5.78%, the Germany-based mealkit delivery company, led the Stoxx 600 with a 6% rise. HelloFresh increased its revenue and margin guidance, citing the “continued exceptionally strong demand across most markets, partly influenced by the still ongoing COVID-19 pandemic and related lockdown measures.”
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