By Alexander Bueso
Date: Wednesday 15 Mar 2017
(ShareCast News) - As the Dutch head to the polls, European equity markets were little changed on Wednesday with investors looking to the US Federal Reserve's latest policy announcement.
By the closing bell the benchmark Stoxx Europe 600 index was up 0.44% to 375.10, while Germany's DAX and France's CAX were up 0.18% and 0.23% at 12,009.87 and 4,985.48, respectively.
In currency markets, the euro was up 0.25% against the dollar to 1.0635 and off 0.28% versus the pound to 0.8707.
Polls have opened in the Netherlands as the Dutch decide on their next prime minister in a closely watched and closely contested election with 28 parties vying for 150 seats.
Philippe Waechter, chief economist at Natixis AM, said that there were two things to keep in mind for the Dutch election, that the extreme right party PVV of Geert Wilders may be the first party after the election with 21 to 25 seats, up from its current 12 seats, but the party has lost momentum in the last week.
He said the PVV "will never have the 75 seats that are necessary to govern. Other parties have said that they do not want to make a coalition with the PVV. The current prime minister's party (VVD) has currently 40 seats and could only have 23 to 27 seats".
"As always in the Netherlands, the government will be a large coalition but the PVV will not be in it", Waechter added.
Craig Erlam, senior market analyst at Oanda, said that the Dutch election is "effectively the canary in the mine" for investors and that there was a trend in polls of underestimating the populist vote such as the UK Brexit referendum and US presidential election last year.
The first exit polls are expected at 2100 GMT.
Investors were also pricing in a 25 basis point interest rate hike by the Fed to between 0.75% and 1%, and will also look for hints on the timing of the next interest rate hike from Chair Janet Yellen.
Neil Wilson, senior market analyst at ETX Capital said that Fed policymakers could hike interest rates by 25 basis points four times this year after it said last December there would be three rate rises in 2017.
Meanwhile, oil prices were on the front foot after the American Petroleum Institute said late on Tuesday that there was a fall in US crude supplies after an OPEC report revealed a rise in Saudi Arabian and US crude output.
Brent crude was up 1.01% to $51.44 a barrel and West Texas Intermediate was 1.47% firmer to $48.43.
In corporate news, E.ON was down 3.07% after the German electric utility unveiled asset sales and job cuts to reduce its debt pile.
Italian luxury goods maker Salvatore Ferragamo fell 2.27% after it posted flat core profits and margins for 2016, together with a 4.4% drop in like-for-like sales.
Glencore was up 2.86 after an upgrade to 'Buy' from 'Neutral' by Goldman Sachs.
Hikma Pharmaceuticals gained 8.04% after it nudged its dividend higher as operating profits were held back last year due to a combination of lower profits from the generics business, greater investment in growth and currency effects.
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