European Equity Markets Lose Steam
Topic: European Equity Markets Lose Steam
The Stoxx Europe 600 index was 0.3% lower in early trading Wednesday as recent upward momentum on European equities markets ran out of steam.
Some better-than-expected German economic data and comments by European Central Bank President Mario Draghi , who on Monday reiterated he is ready to expand ECB stimulus to fight low inflation, had buoyed sentiment earlier in the week.
Much still hinges on the ECB, analysts said.
“European equity investors continue to implicitly place their faith in Mr. Draghi and his colleagues to do the right thing, and they are committing further funds to equities,” said Ian Williams, economist and strategist at brokerage Peel Hunt.
On Wednesday, markets were awaiting the latest clues on the thinking of central banks elsewhere, with the Bank of England and the Federal Reserve due to release minutes of their latest policy meetings.
In the U.K., the BOE has recently expressed doubts as to whether inflation will rise back to its target in the near future. If the minutes show that the hawkish minority among rate-setters now share this view, investors may further push back their expectations of a rate hike.
Major European indexes were flat to slightly lower. Germany’s DAX was little-changed, France’s CAC 40 fell 0.1%, while the U.K.’s FTSE 100 was down 0.2%.
In currency markets, the euro edged higher against the dollar to $1.2545. The yen fell against the buck after the Bank of Japan left its monetary policy on hold, as expected.
In commodities, Brent crude oil was down 0.2% at $78.30 a barrel, while gold fell 0.3% to $1,194.10 a troy ounce.