European shares increased modestly on Wednesday, with the pan-European STOXX 50 index rising 0.53% to 6,199.65 points by 5:30 GMT, recovering from losses in the earlier session after ending in red on Tuesday, according to Reuters. The index had climbed 0.44% to 638.44 points on Tuesday after US President Donald Trump announced a limited energy-related ceasefire between Russia and Ukraine on Sunday through a post on Truth Social. London's FTSE 100 advanced around 1%, outperforming other major regional indexes, as the chemicals sector led gains with a 2% rise. The positive momentum came after Trump's announcement helped ease concerns about potential disruptions to energy supplies and their implications for inflation.
Technology stocks led sectoral gains, advancing 0.8% as ASML climbed 1.8% following the company's strong quarterly results that validated the AI supercycle thesis. The world's largest supplier of chipmaking equipment reported net sales of €11.66 billion in the July to September quarter, beating analyst estimates of €11.7 billion according to Bloomberg data. ASML raised its 2026 sales forecast to between €44 billion ($49 billion) and €45 billion, with the lower end of the range increased from the earlier €43 billion estimate. The company's gross margin jumped to 57.5% in the previous quarter from 54% in the second quarter, while R&D costs are expected to be around €1.2 billion and SG&A costs around €0.4 billion for the full year. ASML President and CEO Christophe Fouquet noted that "with such strong visibility and an order book momentum that continues to increase quarter on quarter this year, we now expect that our supply as currently planned for both 2027 and 2028 will not fully meet the demand of our customers."
Oil prices rose following attacks on vessels in the Strait of Hormuz, a critical route for global oil shipments, which limited gains in equities, as reported by Reuters. The prospect of reduced energy supply disruptions helped improve investor sentiment earlier in the week, while easing euro zone bond yields provided further support to risk-sensitive assets. Lower energy prices could help temper inflationary pressures, although uncertainty surrounding geopolitical developments continues to influence the outlook for European monetary policy, with any renewed supply disruptions potentially complicating the ECB's policy decisions.
Among individual stocks, Orsted fell 4.2% after Bloomberg News reported that the United States would re-evaluate the permit for the Danish energy company's wind farm project off Rhode Island, adding to uncertainty surrounding the offshore wind sector, according to Reuters. Spain's IBEX outperformed regional peers, climbing 1.3%, as the banking sector benefited from easing oil prices and hopes of an energy ceasefire between Russia and Ukraine. Nordex rose 2.5% after the onshore wind turbine manufacturer reported a 30% year-on-year increase in project order intake in the third quarter, highlighting stronger demand for its products. ASML's strong performance was supported by revenue from service and upgrades of machines already installed at customers' sites jumping 19% from the previous quarter, with the company selling 17 EUV machines in the quarter.
Investors were also awaiting US consumer price index data due later on Wednesday for fresh clues on the Federal Reserve's monetary policy outlook, as reported by Reuters. The inflation report could influence expectations for the timing and pace of future interest-rate moves, shaping sentiment across global equity markets. Strong technology-sector momentum, rising energy prices, and expectations around US inflation data kept investors focused on corporate earnings, geopolitical developments, and the interest-rate outlook. The yield spread between French government bonds (OATs) and German Bunds narrowed by 1 basis point to 136.50 basis points, while investors also turned their attention to key September economic data from Germany, Europe's largest economy.
