Investing.com - European stocks edged lower on Wednesday, as disappointing economic data from Germany added to concerns over debt contagion in the euro zone while investors eyed comments by the Federal Reserve later in the day.
During European morning trade, the EURO STOXX 50 edged down 0.11%, France’s CAC 40 declined 0.26%, while Germany’s DAX 30 fell 0.17%.
Official data showed that German producer price inflation fell more-than-expected in May, ticking down 0.3% after a 0.2% rise the previous month. Analysts had expected producer price inflation to fall 0.1% in May.
Meanwhile, investors awaited the conclusion of the Federal Reserve’s two-day policy meeting later Wednesday, amid growing expectations that policymakers may announce a third round of monetary stimulus after a recent string of weak economic data.
Markets were also eyeing political developments in Greece, amid reports local party leaders may be close to forming a coalition government, which would allow Athens to resume negotiations with creditors on its international bailout deal.
French food-products group Danone saw shares decline for the second consecutive session, tumbling 1.50%, after the company issued a profit warning on Tuesday, citing a drop in consumption in southern Europe, especially in Spain, and highlighting the accelerating fallout from Europe's sovereign-debt crisis on large corporations.
Nokia shares also retreated 1.51%, still affected by last week’s downgrade to junk status by Moody’s ratings agency following the announcement of major budget cuts and global layoffs.
Meanwhile, financials stocks were broadly higher, led by Italian lender Unicredit, up 1.78%, while France’s BNP Paribas and Societe Generale jumped 1.56% and 1.32% respectively.
Germany’s two biggest lenders, Deutsche Bank and Commerzbank, also contributed to gains with shares climbing 0.63% and 1%.
In London, FTSE 100 eased 0.08%, weighed by sharp losses in utility companies.
United Utilities tumbled 3.96%, while Severn Trent saw shares plummet 6.92% after saying it will close a large stretch of Kingsholm Road in Gloucester for the second time in a year for flood prevention purposes. Many traders along Kingsholm Road say shutting the road again will put their livelihoods at risk.
On the upside, U.K. lenders led gains as shares in Lloyds Banking surged 1.33% and the Royal Bank of Scotland jumped 1.11%, while Barclays and HSBC Holdings advanced 0.79% and 0.45% respectively.
Mining giant Rio Tinto was also higher, with shares rising 0.22%, while copper producers Xstrata and Kazakhmys added 0.12% and 1.01%.
Elsewhere, Ryanair rose 0.45% after saying it will make another attempt to buy rival Irish airline Aer Lingus, whose shares subsequently skyrocketed 25.24%.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.21% decline, S&P 500 futures signaled a 0.24% fall, while the Nasdaq 100 futures indicated a 0.04% loss.
Later Wednesday, the Federal Reserve was to announce its benchmark interest rate and publish its rate statement. The announcement was to be followed by a press conference with Fed Chairman Ben Bernanke to discuss the monetary policy decision.
During European morning trade, the EURO STOXX 50 edged down 0.11%, France’s CAC 40 declined 0.26%, while Germany’s DAX 30 fell 0.17%.
Official data showed that German producer price inflation fell more-than-expected in May, ticking down 0.3% after a 0.2% rise the previous month. Analysts had expected producer price inflation to fall 0.1% in May.
Meanwhile, investors awaited the conclusion of the Federal Reserve’s two-day policy meeting later Wednesday, amid growing expectations that policymakers may announce a third round of monetary stimulus after a recent string of weak economic data.
Markets were also eyeing political developments in Greece, amid reports local party leaders may be close to forming a coalition government, which would allow Athens to resume negotiations with creditors on its international bailout deal.
French food-products group Danone saw shares decline for the second consecutive session, tumbling 1.50%, after the company issued a profit warning on Tuesday, citing a drop in consumption in southern Europe, especially in Spain, and highlighting the accelerating fallout from Europe's sovereign-debt crisis on large corporations.
Nokia shares also retreated 1.51%, still affected by last week’s downgrade to junk status by Moody’s ratings agency following the announcement of major budget cuts and global layoffs.
Meanwhile, financials stocks were broadly higher, led by Italian lender Unicredit, up 1.78%, while France’s BNP Paribas and Societe Generale jumped 1.56% and 1.32% respectively.
Germany’s two biggest lenders, Deutsche Bank and Commerzbank, also contributed to gains with shares climbing 0.63% and 1%.
In London, FTSE 100 eased 0.08%, weighed by sharp losses in utility companies.
United Utilities tumbled 3.96%, while Severn Trent saw shares plummet 6.92% after saying it will close a large stretch of Kingsholm Road in Gloucester for the second time in a year for flood prevention purposes. Many traders along Kingsholm Road say shutting the road again will put their livelihoods at risk.
On the upside, U.K. lenders led gains as shares in Lloyds Banking surged 1.33% and the Royal Bank of Scotland jumped 1.11%, while Barclays and HSBC Holdings advanced 0.79% and 0.45% respectively.
Mining giant Rio Tinto was also higher, with shares rising 0.22%, while copper producers Xstrata and Kazakhmys added 0.12% and 1.01%.
Elsewhere, Ryanair rose 0.45% after saying it will make another attempt to buy rival Irish airline Aer Lingus, whose shares subsequently skyrocketed 25.24%.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.21% decline, S&P 500 futures signaled a 0.24% fall, while the Nasdaq 100 futures indicated a 0.04% loss.
Later Wednesday, the Federal Reserve was to announce its benchmark interest rate and publish its rate statement. The announcement was to be followed by a press conference with Fed Chairman Ben Bernanke to discuss the monetary policy decision.