European stocks shed Evergrande tensions to trade higher ahead of Fed update

European stocks traded higher on Wednesday as tensions ease over embattled Chinese property developer Evergrande and global investors watch for the outcome of the latest meeting of the U.S. Federal Reserve

The pan-European Stoxx 600 index opened 0.8% higher before paring some gains to trade 0.5% higher with most sectors in positive territory, except for the healthcare, technology and utilities sectors

The best performer on the index this morning was Entain, its share price up 6.5% after the gambling firm announced a $22.4 billion takeover proposal from U.S.-based DraftKings double a bid it received and rejected from MGM earlier this year, Reuters reported

The worst performer on the index was Swedish healthcare company Addlife, down 4.6%, and French care homes company Orpea, which was trading down 2.4%

Top of the agenda for investors on Wednesday is the conclusion of the U.S. Federal Reserve’s highly anticipated September meeting with investors looking out for any indications about the Fed’s tapering of its easy monetary policy

The Fed will release a policy statement with economic and interest rate forecasts, then Chairman Jerome Powell is expected to speak to the media at 2:30 p.m. ET. Powell has said previously that tapering could occur this year, but investors are waiting for more details, particularly after mixed economic data released since Powell’s last comments

European markets saw a solid rebound on Tuesday after a nervous start to the week, largely caused by investor fears surrounding embattled property developer China Evergrande Group and concerns about the contagion risk for the wider Chinese and global economy

Investor sentiment may have been soothed on Wednesday after Evergrande unit Hengda announced it will make a coupon payment on its domestic bonds on Thursday. Still, questions remain over whether the interest on Evergrande’s offshore U.S.-dollar denominated bond — also due Thursday — will be made

That could be the reason behind caution in the U.S. and Asia-Pacific markets overnight; U.S. stock futures opened slightly lower Tuesday night and Asia-Pacific markets are mixed, with investors keeping a close watch on China markets, which reopened for trade on Wednesday after a two-day holiday. Markets in mainland China fell more than 1% on Wednesday’s open before bouncing back slightly

Read more: The global economy could feel the effects of China’s Evergrande crisis. Here’s what investors should know

Key data releases also on the agenda for Europe include flash consumer confidence data for the euro zone in September, Italian industrial sales figures for July and Dutch consumer spending numbers for July. There are no major earnings releases Wednesday