Investing.com - European stock markets traded in a lackluster fashion Wednesday, with investor confidence hit by the Middle East conflict as well as market volatility in China.
At 03:05 ET (07:05 GMT), the DAX index in Germany traded largely unchanged, the CAC 40 in France traded 0.1% lower, while the FTSE 100 in the U.K. gained 0.4%.
Europe benefits from payrolls glow
The main European indices slipped lower, following on from losses in Asia overnight, particularly in China after Beijing policymakers failed to announce any more concrete stimulus measures after the return from a week-long holiday.
China is a major export market for a number of Europe’s major companies, and the second-largest economy in the world has been struggling in the face of sluggish consumer spending and a real estate crisis.
Before the Golden Week holiday, the Chinese government had rolled out a string of stimulus measures, including interest rate cuts.
Meanwhile, the conflict in the Middle East continued Wednesday, with Hezbollah militants targeting Israeli soldiers near the Lebanese border.
The conflict in Lebanon has escalated dramatically in recent weeks as Israel carried out a string of assassinations of top Hezbollah leaders and launched ground operations into southern Lebanon that expanded further this week.
German exports rose in August
Back in Europe, German exports rose in August due to strong demand from the United States, defying expectations for a decline.
Exports rose by 1.3% in August compared with the previous month, data from the federal statistics office showed Wednesday, better than the forecast 1.0% decrease.
The European Central Bank meets next week, and is expected to ease policy once more having already cut rates twice this year as economic growth has weakened while inflationary pressures have eased.
"A cut is very likely and it will not be the last one, the rhythm depending on how the fight against inflation evolves," ECB policymaker Francois Villeroy de Galhau said on Wednesday, in an interview.
Rio Tinto (NYSE:RIO) to buy Arcadium Lithium
In the corporate sector, Rio Tinto (LON:RIO) confirmed earlier Wednesday it will acquire Arcadium Lithium in an all-cash transaction, valued at $6.7 billion, in a deal that will make it the world's third-largest lithium producer.
Rio would gain access to lithium mines, processing facilities and deposits across the world, to help supply a customer base that includes Tesla (NASDAQ:TSLA), BMW (ETR:BMWG) and General Motors (NYSE:GM).
Elsewhere, Volvo (OTC:VLVLY) Cars said its deputy CEO Bjorn Annwall will leave the group as part of a reorganisation.
Crude rebounds; US inventories due
Oil prices rose Wednesday, recouping some of the prior session’s steep losses, although the indication of a large increase in U.S. inventories has limited gains.
By 03:05 ET, the Brent contract climbed 0.5% to $77.55 per barrel, while U.S. crude futures (WTI) traded 0.3% higher at $73.81 per barrel.
Both contracts slumped more than 4% on Tuesday on disappointment of the lack of new stimulus measures by top oil importer China as well as talk Lebanese military group Hezbollah was seeking a ceasefire with Israel, pointing to a potential de-escalation in the Middle East conflict.
Data from the American Petroleum Institute, released on Tuesday, showed U.S. oil inventories grew by 10.9 million barrels in the past week, much more than expectations for an increase of 1.95 million barrels.
Official data, from the Energy Information Administration, are due later in the session, and could spark concerns that US fuel demand was cooling, especially as the country’s mid-South grapples with a series of devastating hurricanes.