CANBERA (dpa-AFX) - European stocks look set to open a tad higher on Thursday, with banking stocks likely to be in focus, after the U.S. Federal Reserve allowed all 34 of the biggest banks in the U.S. to ramp up their dividend payouts and buy back shares, judging their financial foundations were strong enough to withstand a major economic downturn. Technology stocks may also rise, tracking gains among their U.S. peers overnight.
Asian markets are broadly higher, reflecting investor confidence in the global economic outlook after central bankers around the world signaled that interest rates may need to rise. Investors await China's official monthly indexes on factory and service sector activity on Friday for further clues on the economy.
Crude oil futures rose for a sixth straight session after data showed a decrease in gasoline inventories last week. Gold held steady as the dollar hovered near ten-month lows.
Investors seem to have shrugged off North Korea's warning that the country would keep building up its nuclear arsenal regardless of sanctions, pressure or military attack.
In economic releases, economic confidence figures from the euro area and inflation data from Germany are slated for release later in the day.
Germany's GfK consumer confidence survey data is also due, with economists expecting the forward-looking sentiment index to rise to 10.5 in July from 10.4 in June.
Across the Atlantic, data on weekly jobless claims and the final reading on first-quarter GDP may sway investor sentiment.
Overnight, U.S. stocks ended with big gains as the prospect of higher interest rates lifted banking stocks and technology shares also recovered some of their recent losses, helping offset weak housing data. The Dow climbed 0.7 percent, the S&P 500 advanced 0.9 percent and the tech-heavy Nasdaq rallied 1.4 percent.
European markets closed well off their day's lows on Wednesday after media reports suggested that markets misinterpreted comments made a day earlier by ECB President Mario Draghi.
The pan-European Stoxx Europe 600 index closed marginally lower after falling as much as 1 percent earlier in the day. The German DAX edged down 0.2 percent, France's CAC 40 index slipped 0.1 percent and the U.K.'s FTSE 100 slid 0.6 percent.
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