European stocks are seen higher on Wednesday with global sentiment buoyed by a rally on Wall Street that saw the Dow Jones industrial average close above 19,000 for the first time ever.
The FTSE 100 is set to open 37 points higher at 6,856, the DAX is seen 34 points higher at 10,747 and the CAC 40 should begin 17 points up at 4,565.
U.K. Finance Minister Philip Hammond will present his first U.K. budget on Wednesday, known as the Autumn Statement, after telling Britain that the country needed a “fiscal reset.” He is expected to announce an increase in the minimum wage and investments in infrastructure to offset negative impacts from Brexit.
“The Chancellor probably will ease policy further in the next budget, but we doubt that he will set policy positively to stimulate the economy next year,” Pantheon Macroeconomics said in a note.
Oil prices lower
Oil prices were trading lower on Wednesday on doubts that OPEC members will reach a consensus over an output cut. OPEC members are considering a cut of 4 to 4.5 percent in production but it is unclear whether Iraq and Iran would support the deal, according to Reuters.
On the data front, Markit is set to publish its November flash PMI figures for the euro area at 9.00 a.m. London time.
Australian stocks led gains, likely driven by commodity-prices rises, but other Asia Pacific markets traded modestly on Wednesday.
The benchmark ASX 200 advanced 71.06 points, or 1.31 percent, to 5,484.40, with most sectors finishing higher. The heavily-weighted financial sector rose 1.10 percent, while the energy and materials sectors tacked on 1.25 and 1.98 percent respectively.
Ric Spooner, chief market analyst at spread bettor CMC Markets, said in a note that the “market appears to be in a capitulation phase for commodity bears.”
“The consensus view is swinging towards commodity prices maintaining higher levels based on continued demand from China and improved U.S. demand,” he added.
Mining names mostly rose, with major miners advancing more than 2 percent each. Shares of Rio Tinto closed up 2.52 percent, Fortescue was higher by 2.94 percent and BHP Billiton added 2.65 percent.
The Australian dollar jumped to $0.7425, climbing from levels near $0.7320 earlier in the week.
Among other regional markets, in New Zealand, the NZX 50 closed up 35 points, or 0.51 percent, at 6,851.45, while in South Korea, the Kospi rose 0.48 percent. Hong Kong’s Hang Seng index was up 0.26 percent, while Chinese mainland shares traded modestly higher.
The Shanghai composite was up 0.16 percent, while the Shenzhen composite slipped 0.18 percent. Japanese markets were closed Wednesday for the Labor Thanksgiving public holiday.
The session in Asia followed record high finishes on Tuesday in the U.S., and analysts expect the positive momentum in stocks to last in the near term.
“The current state of play is the bulls have got control here and that U.S. equity and many other developed markets are going higher, at least in the short-term,” Chris Weston, chief market strategist at spread bettor IG, said in a note on Wednesday.
Oil prices fell in Asian trade on Wednesday, reversing earlier gains, as doubts re-emerged over whether OPEC would agree to a crude oil production cut at a ministerial meeting next week.
A strong dollar, which traded near the 13 1/2-year peak hit last week, also weighed on prices amid thin trading ahead of the U.S. Thanksgiving holiday on Thursday.
International Brent crude oil futures slipped 8 cents to $49.04 a barrel at 0548 GMT after climbing to $49.42 a barrel earlier in Wednesday’s session on optimism OPEC would agree to an output cut.
Reuters commodities analyst Wang Tao said that Brent could rise to $49.85 per barrel, a level marked by several technical resistance factors.
U.S. West Texas Intermediate (WTI) crude oil futures fell 8 cents to $47.95 a barrel after rising to $48.30 earlier on Wednesday.
“The reason prices fell is renewed concern by traders in the ability of producers to reach agreement with Iran and Iraq on production cuts,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.
Wednesday’s lethargy came after oil prices rallied earlier this week. Traders had anticipated the Organization of the Petroleum Exporting Countries (OPEC) would successfully implement a production cut at its Nov. 30 meeting in order to prop up prices.