European Stocks Rise Modestly as Orsted Shares Decline on Capital Raise
European equity markets opened higher on Monday, buoyed by cautious optimism ahead of the U.S. Federal Reserve’s policy meeting scheduled for Wednesday. The U.K.’s FTSE 100 gained 0.2%, Germany’s DAX increased by 0.4%, and France’s CAC 40 rose 0.3% in early trading.
Orsted Shares Drop Sharply on Deeply Discounted Capital Raise
In contrast to the broader market, Danish wind energy company Orsted experienced a significant decline of more than 5%. The company announced plans to raise 60 billion Danish kroner (approximately $9.4 billion) through a new share issuance priced at 66.60 Danish kroner per share. This represents a steep 67% discount compared to Orsted’s closing price of 200 Danish kroner on Friday, prompting investor concern over dilution and underlying financial pressures.
Upcoming Economic and Political Events
Monday’s trading session lacks major European corporate earnings releases but will feature the publication of European Union trade data. The United Kingdom is preparing for U.S. President Donald Trump’s state visit, which begins Tuesday evening. The president and First Lady Melania Trump will spend Wednesday at Windsor Castle with King Charles and Queen Camilla, followed by talks with U.K. Prime Minister Keir Starmer on Thursday.
Additionally, the U.K. will release its latest inflation figures on Wednesday, preceding the Bank of England’s policy meeting on Thursday. Current forecasts suggest that the BoE is unlikely to reduce interest rates at this session.
U.S. Market and Global Trade Developments
U.S. stock futures showed little movement Sunday night, following the Nasdaq Composite’s record high close on Friday. Investors are focused on the Federal Reserve’s meeting, with market pricing indicating a 96.2% probability of a 25 basis point rate cut and a 3.8% chance of a larger 50 basis point reduction, according to the CME FedWatch Tool. This sentiment is underpinned by recent economic data pointing to a weakening labor market and subdued inflation.
In the Asia-Pacific region, markets showed mixed performance amid ongoing U.S.-China trade negotiations in Madrid. Senior U.S. officials, including Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, met with Chinese Vice Premier He Lifeng and top trade negotiator Li Chenggang. Discussions focused on national security concerns, economic issues, trade tensions, the impending TikTok divestment deadline, and U.S. tariff policies.
FinOracleAI — Market View
The sharp discount in Orsted’s capital raise has introduced negative sentiment specifically for the company’s shares, likely pressuring its stock in the short term. However, the broader European market’s modest gains reflect cautious optimism ahead of the Federal Reserve meeting, where an anticipated rate cut could provide further support. Investors will closely monitor the Fed’s communication and UK inflation data for signals on monetary policy trajectories. Additionally, progress or setbacks in U.S.-China trade talks remain a key risk factor that could sway market sentiment.
Impact: neutral
