LONDON — European stocks closed broadly higher on Wednesday, continuing their upward trend this week, on hopes that the U.S. government shutdown will end soon.
The U.S. government could reopen as soon as the end of this week after the Senate on Monday evening passed a spending bill that has since moved to the House of Representatives for a final vote.
The pan-European Stoxx 600 Index gained a provisional 0.7% during Wednesday's session, with most major bourses and sectors in positive territory.
The U.K.'s FTSE index, which has been tracking an all-time high in recent sessions, was marginally higher by the closing bell, with Germany's DAX up 1.1%.
In the energy sector, SSE soared 16.8% on Wednesday after the U.K. utility company launched a £2 billion ($2.6 billion) equity raise to pay for a new five-year £33 billion investment plan to upgrade the U.K.'s electricity network. The company posted an adjusted operation profit of £655 million for the first half of the year, which missed the £684 million forecast by analysts.
Meanwhile, Germany's largest power producer RWE advanced 9.1% after reporting pre-tax income of 2.71 billion euros in its latest earnings update. The company's adjusted earnings before interest, tax, depreciation and amortization (EBITDA) over the nine-month period came in at 3.48 billion euros, beating analysts' expected 3.14 billion euros.
Elsewhere in earnings, Infineon Technologies added 6.9% on Wednesday after the German chipmaker reported its latest earnings. Revenues came in at 14.6 billion euros for the full-year, down 2% year-on-year, but in line with analysts' forecasts.
Gilt yields nudge higher
Yields on British government bonds — known as gilts — edged higher across the maturity curve on Tuesday, as investors reacted to rumors that Prime Minister Keir Starmer's leadership was under threat.
By 4:37 p.m. in London, the yield on the benchmark 10-year gilt was 1 basis point higher at 4.401%, climbing down from larger gains seen earlier in Wednesday's session. Bond yields and prices move in opposite directions, so when investors are reluctant to lend to a government, the price of the bond falls and the yield rises.
The U.K. government currently has the highest borrowing costs of any G-7 nation, with its 30-year gilt yield trading well above the critical 5% threshold.
Bond yields reflect borrowing costs for the governments who issue them, but can have an effect on mortgage rates, investment returns, the wider economy and personal borrowing.
Meanwhile, the British pound fell 0.1% against the U.S. dollar to trade at $1.313, and shed 0.2% versus the euro.
Across the Atlantic, the Dow Jones Industrial Average and the S&P 500 were higher while the Nasdaq Composite lagged as investors reacted to the end of the longest government shutdown in history.
— CNBC's Pia Singh contributed to this market report.