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European stocks nudge higher as Fed cools inflation fears; M&S up 4.5% - CNBC

European stocks were mostly higher on Wednesday, after U.S. Federal Reserve officials reiterated their dovish monetary policy stance in the face of investor concerns over rising inflation.

The pan-European Stoxx 600 climbed 0.3% in early trade, with travel and leisure stocks adding 1.3% to lead gains while banks slid 0.7%.

The cautious optimism in Europe follows similar sentiment for markets elsewhere on Tuesday and overnight. Stocks in Asia-Pacific were mostly higher in Wednesday afternoon trade, with multiple markets in Southeast Asia (in Indonesia, Singapore and Thailand) closed for a holiday.

U.S. stock futures also advanced in early premarket trade on Wednesday after the market rally stalled Tuesday, with major indexes ending the regular session slightly lower.

Investors are awaiting a speech from Federal Reserve Vice Chair Randal Quarles on Wednesday as some concerns surrounding inflation and potential tapering continue to linger.

On Tuesday, Fed Vice Chair Richard Clarida said the central bank would be able to manage an overshoot in inflation without derailing the country's economic recovery, while San Francisco Federal Reserve President Mary Daly told CNBC that while the recovery so far is encouraging, it is "way too early" to tighten policy.

Attention on cryptocurrencies also remains with China showing its intention to continue a four-year crackdown on bitcoin trading and other cryptocurrency-related activities.

China's Inner Mongolia region has proposed punishments for companies and individuals involved in digital currency mining as it looks to further crackdown on the practice.

The move comes after Chinese Vice Premier Liu He said last week in a statement that it is necessary to "crackdown on Bitcoin mining and trading behavior" to prevent the "transmission of individual risks to the social field."

Earnings in focus

Earnings in Europe came from Marks & Spencer and British Land while HelloFresh holds an annual general meeting.

Marks & Spencer shares climbed 4.5% in early trade, despite the British retailer reporting an 88% slump in annual profit as multiple lockdowns in the U.K. demolished clothing sales.

"The period of these results bears the full brunt of the various lockdowns and with M&S assuming in their base case that there will be no repeats, the numbers should represent the nadir of their fortunes," said Richard Hunter, head of markets at online platform Interactive Investor.

"If this proves to be the year to kitchen sink the numbers, then M&S needs to continue its accelerated transformation to remain relevant. All things being equal, it is expecting to achieve profits of between £300 and £350 million this year, as some exceptional costs drop away and as revenues grow to exceed pre-pandemic levels."

British IT company Softcat climbed 4.2% after projecting full-year results ahead of expectations.

British Land shares fell 1.2% after the commercial property firm posted its third straight annual loss, with the pandemic hitting its office and retail portfolio valuations.

"There is no mistaking the challenge British Land is facing. It's not only being threatened by the rising tide of homeworking, but like a sandcastle, it faces fresh erosion from the heavy spade of e-commerce," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

Streeter noted, however, that the company is demonstrating resilience and "getting its house in order" to adapt to these shifting sands.

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- CNBC's Arjun Kharpal and Hannah Miao contributed to this market report.

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