European stocks may follow Asian stocks higher on Wednesday amid speculation the Federal Reserve would continue to provide economic stimulus until next year after St. Louis Fed President James Bullard and New York Fed President William Dudley said there is no case yet for curtailing bond purchases, given low inflation and mixed signals for growth prospects.
Nevertheless, caution may prevail as Fed Chairman Ben Bernanke testifies before the Joint Economic Committee of Congress later in the global day. Besides Bernanke's speech, traders also await existing U.S. home sales data as well as the minutes of the latest Fed meeting for hints of potential changes in the Fed's asset purchase program.
Closer home, the Bank of England's minutes of May 9 meeting, U.K. retail sales and public sector net borrowing data for April are slated for release in the European session.
Asian stocks are broadly higher, buoyed by positive lead from Wall Street on expectations the Fed won't begin tapering QE3 any time soon. Japan's Nikkei index is rallying over 2 percent to a fresh 5-1/2 year high after the Bank of Japan pledged to maintain its ambitious quantitative easing program so that the monetary base will increase at an annual pace of about 60-70 trillion yen. Meanwhile, data from the Ministry of Finance showed that Japan's exports rose less than expected in April from a year earlier, highlighting weakness in global demand.
Australia's All Ordinaries index is declining 0.3 percent after a report from the Westpac-Melbourne Institute showed that a measure of Australian consumer confidence slumped by the most in 17 months in May. Hong Kong's Hang Seng index is losing 0.6 percent as trading resumed at 1pm local time following a delay due to a storm warning.
In corporate news, French utility EDF said it is in exclusive talks with Czech utility Energeticky a Prumyslovy Holding AS to sell a stake in Slovakia's electricity distributor Stredoslovenska Energetika AS.
A consortium of companies consisting of oilfield services provider , Samsung Engineering Co and China Huanqiu Contracting & Engineering Corporation has won a contract for a grassroot liquefied natural gas or LNG project in Canada.
European stocks rose on Tuesday, erasing earlier losses, driven by expectations that the Fed would stick to its $85 billion monthly bond-buying program until next year to bolster the economic recovery. Benchmark indexes in Germany, France, Switzerland and the U.K. rose between 0.2 percent and 0.7 percent.
U.S. stocks posted modest gains overnight after home improvement giant Home Depot raised its sales and profit outlook for the year and comments from two Federal Reserve officials suggested the Federal Reserve remains far from winding down its bond-buying program. The Dow rose 0.3 percent, while the tech-heavy Nasdaq and the S&P 500 edged up about 0.2 percent each.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.