European Markets Close Higher As Investors Track Results And Eye Fed Policy

European stocks moved higher on Tuesday, bouncing back on bargain hunting after sharp losses in the previous session.

A positive reversal on Wall Street, some encouraging earnings updates and data showing a drop in euro area unemployment contributed a bit to the firm undertone in the markets.

Investors looked ahead to the upcoming monetary policy meeting of the Federal Reserve.

The U.S. central bank is expected to hike interest rates by a half-a-percentage point when it hands down its policy decision on Wednesday - the first such increase in about 20 years.

The pan European Stoxx 600 climbed 0.53%. The U.K.'s FTSE 100 gained 0.22%, Germany's DAX surged up 0.72% and France's CAC 40 advanced 0.79%, while Switzerland's SMI moved up 0.25%.

Among other markets in European markets, Austria, Belgium, Czech Republic, Finland, Iceland, Netherlands, Norway, Portugal, Spain and Sweden closed higher.

Denmark, Greece, Ireland and Poland ended weak.

In the UK market, BP rallied 5.8% after first-quarter earnings topped estimates. BAE Systems, IAG, BT Group, Sainsbury (J), M&G, Whitbread, Standard Chartered, B&M European Value Retail, HSBC Holdings and Next gained 2 to 3.6%.

Shell, Taylor Wimpey, Berkeley Holdings, Barclays, Vodafone Group, Natwest Group and Reckitt Benckiser also moved up sharply.

Segro plunged more than 10%. Avast, Howden Joinery Group, Croda International, Spirax-Sarco Engineering, Dechra Pharmaceuticals, Glencore, Experian, Severn Trent, Halma and Ferguson lost 2 to 5.8%.

In the French market, BNP Paribas climbed more than 5% after reporting a jump in first-quarter earnings.

ArcelorMittal, Renault, Accor, Thales, Valeo, Societe Generale, Faurecia, Credit Agricole and Carrefour moved up 2.5 to 4%.

STMicroElectronics, Air France-KLM, Vivendi, Airbus Group, Orange, Sodexo and Publicis Groupe gained 1.3 to 2%.

Bouygues plunged more than 4%. Kering, L'Oreal, Hermes International, Schneider Electric, Saint Gobain and LVMH shed 1 to 3%.

In Germany, Commerzbank and Deutsche Bank gained about 4% and 3.5%, respectively, as the yield on the 10-year German bund reached the 1% level for the first time in nearly seven years in anticipation of quicker interest rate hikes.

MTU Aero Engines moved up by about 5%. Continental, Porsche Automobil, BMW, Hello Fresh, Fresenius Medical Care, Infineon Technologies, Volkswagen, Fresenius and Zalando gained 1.3 to 3%.

Covestro tumbled more than 7%. SAP shed about 1.7%, while Adidas, Siemens, BASF and E.ON lost 0.7 to 1.2%.

In economic releases, Euro area unemployment rate dropped to a record low in March as firms raised hiring even as the war in Ukraine and record high inflation damped demand and production, data published by Eurostat revealed.

Higher prices for energy and intermediate goods pushed up factory gate inflation to another historic high in March, another report from Eurostat showed.

The jobless rate fell slightly to a seasonally adjusted 6.8% in March from revised 6.9% in February. In the same period last year, the unemployment rate was 8.2%.

The rate was forecast to drop to 6.7% from February's initially estimated 6.8%.

The EU unemployment rate came in at 6.2%, down from 6.3% a month ago.

Germany's unemployment declined in April, the Federal Employment Agency reportedly said.

The number of people out of work decreased 13,000 from March, compared to the expected decline of 15,000. The jobless rate remained unchanged at 5% in April, in line with expectations.

Data published by Destatis earlier in the day showed that the jobless rate fell to a seasonally adjusted to 2.9% in March from 3% percent in February.

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