Investing.com - European markets moved higher on Thursday, even as the Federal Reserve signalled the possibility for an additional rate hike before this year and announced the winding down of its stimulus program.
The EURO STOXX 50 gained 0.46%, France’s CAC 40 climbed 0.40%, while Germany’s DAX 30 was up 0.18% by 03:45 a.m. ET (07:45 GMT).
As expected, the Fed left interest rates unchanged at the conclusion of its two-day policy meeting on Wednesday.
However, the central bank indicated that one more interest rate hike is likely this year, even though it reduced its outlook for inflation from 1.7% this year to 1.5%, and from 2% to 1.9% in 2018.
The Fed also said it will begin to roll off its $4.5 trillion balance sheet in October. Most assets consist of the Treasurys and mortgage-backed securities it acquired under the bank's quantitative easing program.
Financial stocks were sharply higher, as French lenders BNP Paribas (PA:BNPP) and Societe Generale (PA:SOGN) rallied 1.74% and 1.86%, while Germany's Deutsche Bank (DE:DBKGn) and Commerzbank (DE:CBKG) surged 3.17% and 4.43%.
Among peripheral lenders, Italy's Intesa Sanpaolo (MI:ISP) and Unicredit (MI:CRDI) climbed 0.80% and 1.66% respectively, while Spanish banks BBVA (MC:BBVA) and Banco Santander (MC:SAN) jumped 1.30% and 1.28%.
Elsewhere, E.ON SE (DE:EONGn) saw shares tumble 1.87% following news Finnish power company Fortum is in talks to buy the German utility’s remaining stake in Uniper for €3.8 billion.
Uniper is the power stations and trading business E.ON spun off last year.
Vonovia SE (DE:VNAn) added to losses, as shares declined 1.14% after analysts at Goldman Sachs (NYSE:GS) reaffirmed their “neutral” rating on the stock.
In London, FTSE 100 dipped 0.03%, weighed by Capita PLC (LON:CPI), whose shares dove 9.32% after the outsourcer said on Thursday that its first-half underlying revenue dropped by 3%.
Mining stocks were also broadly lower on the commodity-heavy index. Shares in Glencore (LON:GLEN) lost 1.75% and Antofagasta (LON:ANTO) plummeted 2.97%, while Randgold Resources (LON:RRS) and Fresnillo (LON:FRES) plunged 2.81% and 3.81% respectively.
On the upside, CRH (LON:CRH) shares climbed 3.01% after the building material group announced plans to buy U.S. cement maker Ash Grove Cement in a $3.5 billion deal to grow its North America business.
In the financial sector, stocks were also on the upside. Lloyds Banking (LON:LLOY) and HSBC Holdings (LON:HSBA) advanced 0.62% and 0.69% respectively, while the Royal Bank of Scotland (LON:RBS) jumped 1.52% and Barclays (LON:BARC) surged 2.02%.
In the U.S., equity markets pointed to a steady to lower open. The Dow Jones Industrial Average futures pointed to a 0.07% dip, S&P 500 futures signaled a 0.11% loss, while the Nasdaq 100 futures indicated a 0.19% fall.