European stocks climb before EU summit

But there was some nervousness about a possible US-EU trade war after a tariff threat by Washington.

Meanwhile, the European Central Bank held key interest rates at historic lows at a regular policy meeting Wednesday.

At a news conference, bank chief Mario Draghi warned of risks weighing on eurozone growth prospects but dismissed fears of a recession. He also said it was too early to take steps to help out banks whose profit margins have been squeezed by negative interest rates.

The next big item on the monetary policy agenda is Wednesday’s release of minutes from the US Federal Reserve’s latest meeting.

The London stock market lagged behind its eurozone peers as the pound strengthened, typically eating into profits of London-listed multinationals with major earnings in other currencies.

Sterling benefited from the view that a Brexit delay would reduce the chances of a “hard” British exit from the European Union which would be expected to have dire economic consequences.

The currency shrugged off news that the UK economy grew by just 0.2 percent in February from a month earlier.

– ‘Anything but boring’ –

Analysts have dubbed the combination of the EU summit, the ECB decision and the Fed minutes “Super Wednesday”, making for “anything but a boring day in the markets”, as Oanda analyst Craig Erlam put it.

“Today is the day we have all been waiting for; the reason why markets have been so subdued at the start of the week,” he said.

European leaders will gather for a summit showdown to decide how long a Brexit delay to grant British Prime Minister Theresa May — and under what conditions.

Without a postponement, Britain is due to crash out of the European Union at midnight on Friday under a “no-deal” Brexit that could trigger economic chaos.

May has embarked on a last-ditch battle to postpone Brexit from April 12 to June 30 to arrange an orderly departure — but European leaders are expected to offer her a longer delay of up to a year.

“All eyes are on the EU27 meeting which has the potential to force the UK to choose between no-deal or no-Brexit,” said IG analyst Joshua Mahony.

“Meanwhile, US trade wars are back on the agenda,” he added.

European and US equities had fallen Tuesday amid a flare-up in trade tensions between Washington and Brussels.

– ‘Wrath of Trump’ –

US President Donald Trump has threatened to impose tariffs on billions in European imports in retaliation over subsidies to aviation giant Airbus.

The warning from Trump’s administration that it would impose levies on more than $11 billion of European imports jolted investors.

Airbus stock was steady in the European afternoon on the first day under new chief executive Guillaume Faury.

The stock had dived 1.86 percent lower on Tuesday.

The development stoked concerns about the White House’s hardline protectionist agenda that has taken aim at its biggest trading partners.

“Friend or foe, the latest headline suggests no country is exempt from the wrath of President Trump’s trade agenda,” warned Stephen Innes at SPI Asset Management.

– Key figures around 1345 GMT –

London – FTSE 100: FLAT at 7,426.92 points

Frankfurt – DAX 30: UP 0.6 percent at 11,919.97

Paris – CAC 40: UP 0.4 percent at 5,460.20

EURO STOXX 50: UP 0.4 percent at 3,431.54

New York – Dow: up 0.1 percent at 26,173.37

Pound/dollar: UP at $1.3075 from $1.3052 at 2100 GMT on Tuesday

Euro/pound: DOWN at 86.00 pence from 86.29 pence

Euro/dollar: DOWN at $1.1245 from $1.1263

Dollar/yen: UP at 111.07 yen from 111.14 yen

Tokyo – Nikkei 225: DOWN 0.5 percent at 21,687.57 (close)

Hong Kong – Hang Seng: DOWN 0.1 percent at 30,119.56 (close)

Shanghai – Composite: UP 0.1 percent at 3,241.93 (close)

Oil – Brent Crude: UP 24 cents at $70.85 per barrel

Oil – West Texas Intermediate: UP 32 cents at $64.30

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