European markets higher as investors look ahead to ECB meeting; Inditex up 5.2%

European stocks were higher Wednesday, with investors in the region looking ahead to the next meeting of the European Central Bank (ECB).

The pan-European Stoxx 600 was up 0.5% in early trade, with all major bourses and the majority of sectors in the green. Retail stocks led gains, up 1.9%, while banks fell 0.4%.

Zara owner Inditex jumped to the top of the benchmark, up 5.2%, after reporting 7% sales growth in the first quarter. Sales hit 8.2 billion euros ($8.9 billion) in the three months to April, the company said Wednesday, broadly in line with expectations, according to an LSEG poll.

On the data front, final purchasing managers’ index (PMI) data for the euro zone in May, a measure of services and manufacturing activity in the single currency area, is due.

The ECB is widely expected to cut interest rates for the first time since 2019 when policymakers meet on Thursday, but investors will watch closely to see whether a slightly higher-than-expected euro zone inflation print released last Friday will affect the central bank’s decision-making.

In other news, Asia-Pacific markets were mixed overnight as investors assessed India’s election results after Prime Minister Narendra Modi’s Bharatiya Janata Party fell short of an outright majority in the lower house of parliament.

Nevertheless, Modi is set for a third term in power after the BJP-led National Democratic Alliance secured 294 seats, more than the 272 needed for the coalition to form the government.

U.S. stock futures were near flat Tuesday night as investors geared up for private payroll data, with economists polled by Dow Jones anticipating the data will show private employers added 175,000 jobs in May.