European stocks experienced a modest uptick on Wednesday as investors turned their attention to the upcoming European Central Bank (ECB) meeting on Thursday and the release of U.S. labor market data slated for Friday, both of which are expected to provide significant market direction.
Anticipation is building around the ECB's likely decision to reduce borrowing costs by 25 basis points from the current record level of 4 percent.
On the economic front, the final reading of the HCOB Eurozone Composite PMI for May registered at 52.2, a slight dip from the preliminary figure of 52.3 but an improvement from April's 51.7. This marks the highest growth rate since May 2023 as inflation continues to subside.
In France, industrial output increased by 0.5 percent month-over-month in April, reversing a 0.2 percent decline from the previous month, according to data from the statistical office INSEE. This represents the strongest rise in five months.
The pan-European STOXX 600 index rose by 0.5 percent to 519.63, recovering from a similar decline in the previous session. Meanwhile, Germany's DAX gained 0.6 percent, France's CAC 40 added 0.4 percent, and the U.K.'s FTSE 100 moved up by 0.2 percent.
In corporate developments, Inditex, the owner of Zara, surged by 4.7 percent following its first-quarter sales and profit growth report. However, Elekta AB, a Swedish radiation therapy equipment manufacturer, plummeted by over 15 percent after its Q4 EBIT failed to meet expectations.
British gas company Centrica fell by 4.3 percent after reporting that its performance this year has aligned with analyst predictions. KPN saw a 1.4 percent increase upon signing an agreement with Dutch pension fund ABP to form a new tower company, TowerCo.
Workspace Group, despite widening its pretax loss, rallied by 2.3 percent. In the pharmaceutical sector, AstraZeneca gained 1 percent on the news of finalizing its acquisition of clinical-stage biopharmaceutical company Fusion Pharmaceuticals.
