Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

European shares slip ahead of Fed outcome; BMW races higher

Published 03/17/2021, 04:41 AM
Updated 03/17/2021, 05:30 AM
© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt

© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt

By Sruthi Shankar and Devik Jain

(Reuters) - European stocks ticked lower on Wednesday as most investors stayed on the sidelines ahead of the U.S. Federal Reserve's policy decision, while German carmaker BMW jumped after forecasting significant profit growth in 2021.

The pan-European STOXX 600 index edged 0.3% lower, trading below a one-year peak after a cautious session in Asian markets.

The Fed's monetary policy stance will be closely watched after a recent run-up in Treasury yields stoked concerns about a pick-up in inflation as the U.S. economy rebounds from pandemic lows. The central bank's policy statement and economic forecasts are due at 2 p.m. EDT (1800 GMT).

"The Fed at this point probably thinks that the impact of the high yield is relatively modest on the stock market," said Dhaval Joshi, chief strategist at BCA Research in London.

"They will stick to their narrative, and only if there is a big sort of pushback in the market crisis, would they intervene aggressively."

A move into some of the cheaply valued sectors such as banks and energy has pushed European stocks closer to record levels hit last year, with investors counting on vaccination drives and stimulus measures to spur a strong global rebound this year.

BMW rose 4.4% after it said it expects a significant annual increase in group pre-tax profit in 2021 as it forecast a strong performance in all its segments.

Europe's automobiles & parts index gained 1.5% to hit a fresh 2018 high, with Volkswagen (DE:VOWG_p) rising 3.1% after it forecast its 2021 deliveries, sales and earnings to come in above the previous year's level.

German airport operator Fraport jumped 3.9% after HSBC upgraded the stock to "buy", saying the pandemic has forced the company to become "better".

Austrian hydropower producer Verbund slid 4.3% as it expects 2021 profit to fall after a 14% rise in 2020, thanks to lower electricity prices.

© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt

Real estate, oil & gas and retail stocks were the top decliners.

Latest comments

will the fed rate stay same or will it rise
There will be no increase.
will be all green this evening
Why does wallstreet pretend like they don't know what Powell is going to say..
Loosen up that tin foil hat
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.