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European stocks close flat amid mixed sector performance, central bank focus
(MENAFN) European stock markets closed with little change on Wednesday as gains in the technology sector were offset by losses in the property sector, while investors shifted their attention to the European Central Bank's upcoming interest rate decision. The pan-European Stoxx 600 index saw minimal movement throughout the day, reflecting a cautious mood among traders.
German Stocks showed some resilience, outperforming their European counterparts, with Commerzbank shares surging by 16 percent. This sharp rise followed the news that Italy’s UniCredit had acquired a 9 percent stake in the German bank, including a 4.5 percent share bought from the German government for 702 million euros (USD775.29 million). Meanwhile, technology stocks provided some uplift to the broader market, driven by a 3.8 percent increase in shares of ASML Holdings, a heavyweight in the sector. However, the gains were largely neutralized by a 0.8 percent decline in the property sector, reflecting continued concerns over the real estate market.
The basic resources sector managed to provide modest support to the market, with a 0.4 percent rise as copper prices climbed, bolstered by a weaker dollar. However, the UK's FTSE 100 index fell by 0.2 percent, weighed down by domestic economic data that showed no growth in the country's GDP on a month-to-month basis for July. Market participants were also closely monitoring U.S. inflation data, which indicated a slight increase in consumer prices for August, while core inflation remained steady amid rising costs for rents and certain services. This data has reduced expectations for the U.S. Federal Reserve to implement a larger rate cut, with financial markets now seeing only a 15 percent chance of a 50 basis point cut at its September 18 meeting, down from a 30 percent probability before the inflation report. Instead, a 25 basis point cut appears more likely.
Looking ahead, investors are focusing on the European Central Bank meeting, where a 25 basis point rate cut is widely anticipated. In individual stock movements, British pest control company Rentokil saw its shares plunge by 20 percent after it reported a slowdown in revenue growth in North America and announced plans to cut jobs, highlighting sector-specific challenges amidst a broader market awaiting central bank decisions.
German Stocks showed some resilience, outperforming their European counterparts, with Commerzbank shares surging by 16 percent. This sharp rise followed the news that Italy’s UniCredit had acquired a 9 percent stake in the German bank, including a 4.5 percent share bought from the German government for 702 million euros (USD775.29 million). Meanwhile, technology stocks provided some uplift to the broader market, driven by a 3.8 percent increase in shares of ASML Holdings, a heavyweight in the sector. However, the gains were largely neutralized by a 0.8 percent decline in the property sector, reflecting continued concerns over the real estate market.
The basic resources sector managed to provide modest support to the market, with a 0.4 percent rise as copper prices climbed, bolstered by a weaker dollar. However, the UK's FTSE 100 index fell by 0.2 percent, weighed down by domestic economic data that showed no growth in the country's GDP on a month-to-month basis for July. Market participants were also closely monitoring U.S. inflation data, which indicated a slight increase in consumer prices for August, while core inflation remained steady amid rising costs for rents and certain services. This data has reduced expectations for the U.S. Federal Reserve to implement a larger rate cut, with financial markets now seeing only a 15 percent chance of a 50 basis point cut at its September 18 meeting, down from a 30 percent probability before the inflation report. Instead, a 25 basis point cut appears more likely.
Looking ahead, investors are focusing on the European Central Bank meeting, where a 25 basis point rate cut is widely anticipated. In individual stock movements, British pest control company Rentokil saw its shares plunge by 20 percent after it reported a slowdown in revenue growth in North America and announced plans to cut jobs, highlighting sector-specific challenges amidst a broader market awaiting central bank decisions.
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