European Shares Climb Amid Tech and Resources Surge Ahead of U.S. Inflation Data

European shares opened higher on Wednesday, driven by gains in tech and basic resources sectors. The STOXX 600 index rose by 0.2%, with ASML Holding and basic resources leading the charge. Investors are closely watching U.S. inflation data for hints on the Federal Reserve's impending interest rate decision.

European shares opened higher on Wednesday, bolstered by gains in the tech and basic resources sectors while investors braced for a critical U.S. inflation reading that could influence the Federal Reserve's interest rate decision next week. The pan-European STOXX 600 index registered a 0.2% increase, with all regional indexes trading positively.

Technology stocks surged by 1.4%, led by ASML Holding's 3.8% gain. Basic resources also contributed to the uptick, rising 1.2% as copper prices strengthened due to a softer U.S. dollar.

Britain's FTSE 100 ticked up 0.4% following static GDP data for July. With limited economic data from Europe, investor attention is fixated on U.S. consumer price figures slated for release at 1230 GMT, which could give significant clues about the Federal Reserve's rate decision.

Anticipation is high that the Fed will cut rates next week, though uncertainty remains about the magnitude. A 33% chance exists for a 50-basis-point cut. Global investors remain cautious after the U.S. presidential debate between Kamala Harris and Donald Trump, noting a shift in betting markets toward Harris post-debate.

Laura Cooper, global investment strategist at Nuveen, commented, "Investors are trying to grapple with an elevated degree of uncertainty. We're going to see greater bouts of volatility heading into that November election until it becomes clear on the policy front." European Central Bank board member Elizabeth McCaul and supervisor Claudia Buch are expected to comment later today, ahead of the ECB meeting anticipated to cut interest rates by 25 basis points. "Markets are going to take cues from Christine Lagarde's press conference where she will want to keep that flexibility open instead of having a predetermined target level," added Cooper.

Commerzbank surged nearly 16% after Italy's UniCredit acquired a 9% stake in the German bank. Meanwhile, Rentokil plummeted 18.5% on news of a slowdown in North American revenue and impending job cuts. Inditex experienced a 4.2% rise, lifting the retail sector, thanks to robust sales of its new autumn-winter collections.

(With inputs from agencies.)