European stocks gain ahead of PMI data; Inditex surges

Investing.com - European stock markets edged higher Wednesday, rebounding after the previous session’s losses ahead of key regional activity data as investors await the European Central Bank’s latest policy meeting.

At 03:05 ET (07:05 GMT), the DAX index in Germany traded 0.4% higher, the CAC 40 in France rose 0.5% and the FTSE 100 in the U.K. gained 0.3%.

PMIs due before ECB meeting 

The European Central Bank meets on Thursday, and an interest rate cut of 25 basis points from record-high levels is widely expected.

Persuaded by signs of moderating inflation in Europe, policymakers at the ECB have all but promised to ratchet down borrowing costs at their gathering on Thursday.

In a note to clients, analysts at Citi said the region's equities "typically" receive some support from rate cuts, adding that they will likely be boosted by an "inflecting earnings picture" as well.

While a cut on Thursday is largely seen as a certainty, there remain doubts about what the ECB will agree to in terms of rate cuts for the rest of the year after a slightly higher than expected May inflation print in the eurozone on Friday.

French industrial production rose 0.5% on the month in April, an improvement from the drop of 0.2% the prior month, but most eyes Wednesday will be on the final eurozone purchasing managers’ index data for May, a measure of services and manufacturing activity in the single currency area.

Inditex impresses with Q1 sales

In corporate news, Inditex (BME:ITX) stock rose over 4% after the world's largest listed fashion retailer said its sales grew by 7% in the first quarter of its fiscal year, while net profit rose 11%.

The company has outperformed competitors in recent quarters benefiting from investments in new in-store and online experiences. 

Crude falls after US inventories build 

Crude prices slipped lower Wednesday, trading around four-month lows after industry data pointed to a bumper build in U.S. inventories. 

By 03:05 ET, the U.S. crude futures (WTI) traded 0.1% lower at $73.19 per barrel, while the Brent contract dropped 0.1% to $77.47 per barrel.

Both contracts have extended losses into a sixth consecutive session, and were close to their weakest levels since early February. 

Data from the American Petroleum Institute showed U.S. crude inventories saw a build of about 4 million barrels in the week to May 31. Gasoline and distillate inventories also registered increases, raising concerns about demand in the world’s biggest fuel consumer, even as the travel-heavy summer season began. 

The crude market has seen weakness after the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, left open over the weekend the possibility of voluntary cuts from eight members to be gradually unwound from October onward.