European Stocks Set for a Higher Open

European stocks turned lower after a positive start on Wednesday, with the STOXX 50 falling 0.3% and the STOXX 600 slipping 0.2%, as investors avoided taking large positions while assessing renewed tensions in the Middle East after the US and Iran exchanged strikes and awaiting the ECB's monetary policy decision on Thursday. Meanwhile, the ECB is widely expected to raise interest rates by 25bps this month, with investors closely watching policymakers' guidance on the future path of monetary policy. In the US, attention is also focused on the CPI report due later in the day. HSBC Holdings dropped 2.2% as UK lenders extended losses from the previous session after a JP Morgan note highlighted a potentially greater impact from new Chinese regulations. SAP and Siemens Energy both fell 1.7%, while Thyssenkrupp lost 3.5%. On the upside, STMicroelectronics gained 1.2% after BofA Global Research upgraded the chipmaker to "buy" from "neutral", while Infineon advanced 0.6%.

European stocks edged higher on Wednesday, with the STOXX 50 and STOXX 600 both gaining 0.2%, despite renewed tensions in the Middle East after the US and Iran exchanged strikes. Oil prices swung around the flatline following the developments. Investors are also looking ahead to the ECB's monetary policy decision due tomorrow. Among individual stocks, STMicroelectronics rose 2% after BofA Global Research upgraded the chipmaker to "buy" from "neutral", while Infineon advanced 1.7% and Nestle (1.2%), TotalEnergies (0.7%) and Unicredit (1.4%) also booked gains. In contrast, UK lenders extended losses from the previous session after a JP Morgan note highlighted a potentially greater impact from new Chinese regulations. HSBC and Standard Chartered both fell more than 1%. SAP (-1.7%) and UBS (-1.7%) also traded lower and Sanofi declined 0.9% as the company said it will stop phase 3 trial of riliprubart in CIDP patients.

European equity markets were poised for a positive open on Wednesday as investor sentiment improved despite escalating tensions in the Middle East. Iran launched attacks against several Gulf nations, including Bahrain, Jordan, and Kuwait, after the US carried out “self-defense strikes” in response to the downing of an American helicopter, raising fears that peace negotiations could unravel. Investors also awaited a crucial US inflation report that could strengthen the case for a Federal Reserve interest rate hike this year. Meanwhile, the European Central Bank is widely expected to raise rates on Thursday as policymakers respond to a surge in energy prices triggered by the Middle East conflict. In premarket trading, both Euro Stoxx 50 and Stoxx 600 futures advanced around 0.3%.