European index slightly higher

On Thursday the pan-European stock-market index traded slightly higher as gains in auto makers and media companies helped to dispel some of the gloom emanating from a rout in U.S. markets on Wednesday.

In the spotlight for European investors is a policy update from the European Central Bank and its boss Mario Draghi. The Stoxx Europe 600 rose 0.3%, after declining on Wednesday. Germany’s DAX 30 advanced by 0.5%, while France’s CAC 40 gained 1.2%. Meanwhile, the U.K.’s FTSE 100 traded virtually unchanged at 6,961.99. The closely followed FTSE MIB Italy index added 1.4%.

Signs of tepid growth and subdued inflation are expected to lead to a somewhat dovish tone from ECB President Draghi, though he will likely reaffirm a plan to wind down quantitative easing in December and reiterate no rate rise until next summer.

Italy’s budget battle with the European Union also is likely to be a topic of questioning for the policy maker when he holds his news conference following a regular ECB meeting.The European Commission Tuesday sent Italy back to the drawing board over its 2019 budget proposal and Italian Finance Minister Giovanni Tria said he sees no reason to present a revised budget.

The ECB is also seen as virtually certain to retain language stating that rates will remain at present, ultralow levels at least through next summer. However, angst about a troubled eurozone economy in the face of the EU’s clashes with Italian politicians and the turmoil wrought from the U.K.’s exit from the trade bloc will likely take prime stage.

On Wednesday, the euro was pushed lower as the eurozone purchasing-manager index readings came in weakerthan-expected, notably in Germany where growth hit a three-year low.

Meanwhile, U.K. Prime Minister Theresa May has been confronting challenges to her leadership as politicians express disgruntlement with her Brexit negotiations.