Europe close: Stocks gain on the back of Powell's testimony

(Sharecast News) - European shares extended gains on Wednesday as investors apparently breathed a sigh of relief following US Federal Reserve Chair Jerome Powell's congressional testimony. "Equities have dusted themselves down after yesterday's sudden drop, relieved that Powell's testimony to US lawmakers has so far not revealed any unpleasant surprises. 'Need more evidence' is the Fed's latest mantra, as it seeks to avoid cutting too early, but it seems stock markets are content with this," said IG chief market analyst Chris Beauchamp.

"Should inflation start to pick up more sustainably, and Fed officials talk up rate hikes again, however, and the mood could shift dramatically."

The pan-European Stoxx 600 was up 0.39% at 498.21, with all the major regional bourses higher alongside.

Speaking to the U.S. House of Representatives' Committee on Financial Services, Powell said the Fed wanted to see "more good data" in order to be sure that inflation was headed down to its 2% target.

He did nevertheless expect rate cuts to be appropriate at some point in 2024.

In European economic news, Eurozone construction output ticked up slightly in February, but the sector's contraction extended to 22 months on weak orders and demand, according to a PMI survey published on Wednesday.

In a separate data release, retail sales in the single currency bloc were reported as falling by less than expected in January on an annualised basis.

In equity news, Legal & General slipped as the UK life insurer delivered below-par operating profits.

Shares in French reinsurer Scor were near the top of the Stoxx 600, up 8% after reporting record annual results.