FRANKFURT: Europe’s STOXX 600 closed higher on Wednesday boosted by consumer and healthcare stocks, while declines in tech and defence stocks limited gains, ahead of a crucial meeting of global central bankers.

The pan-European STOXX 600 index closed 0.2% up, at its highest closing level in more than five months.

However, most major regional bourses fell, with Germany’s DAX down 0.6%, but the UK’s FTSE 100 hit a record high and closed 1.1% higher. Data showed UK inflation rose to 3.8% in July, its highest since early 2024 and in line with the Bank of England’s expectations.

Among sectors, consumer-facing food and beverage stocks gained the most, up 2.3%, led by Nestle’s 3.6% rise. Personal goods and household companies followed, gaining 1.4%.

Optimism of progress towards ending Russia’s war in Ukraine persisted, as the US and its allies prepared to work out what military support for Ukraine might involve as part of a deal, but caution also lingered as the details were not clear.

Shares of European defence-linked companies dropped 1.4%, after suffering their worst day in more than a month in the previous session on expectations of a Ukraine peace deal.

“Even if the war ends, there’s a huge restocking cycle that needs to go on for countries to replenish their weapons, which will keep these companies in business for a long time,” said Michael Field, chief equity strategist at Morningstar.

“The market is slightly flawed in its thinking about the (defence) sector.”

Heavyweight tech stocks fell 0.5%, tracking a tech sell-off in the US, over concerns over an AI stock bubble and uncertainty around the interest rate outlook.

This week, the focus will be on the Federal Reserve’s annual Jackson Hole symposium, where Chair Jerome Powell and other major central bank heads are set to speak.

“There’s always a big expectation and that kind of gets moderated down… I would caution anything massive coming out of this,” said Field.

The STOXX 600 has gained about 10.2% so far this year on hopes of higher spending in the bloc, a shift to European assets in the first half of 2025 and rising expectations of a US interest rate cut. Rockwool fell 16.2%, the most on the STOXX 600, after the Danish mineral wool maker lowered its full year guidance.