Investing.com - European stocks closed mixed Wednesday, as reports of unlimited bond buying by the European Central Bank helped support equities despite economic slowdown signals.
At the close of European trade, the EURO STOXX 50 added 0.22%, France’s CAC 40 climbed 0.20%, while Germany’s DAX 30 rose 0.46%.
Launching the equity rally, Bloomberg reported that the ECB is planning "unlimited, sterilized" bond buying, without setting bond yield targets. The plan called, the Monetary Outright Transaction proposal, is reported to be focused on government bonds with maturities of up to three years.
The ECB declined to either confirm or decline the report.
The euro has been supported recently by expectations that the ECB is set to announce more details of measures to help stabilize the region’s sovereign debt markets after its policy meeting on Thursday.
Meanwhile, a report showing that service sector activity in the euro zone contracted at a slightly faster rate than initially estimated in August added to fears that the bloc is set to enter a technical recession in the third quarter.
Financial stocks remained mixed, as shares in France and Germany’s biggest lenders, BNP Paribas and Deutsche Bank, added 0.14% and 0.07%, while Societe Generale dropped 0.34%.
Elsewhere, Swiss jewelry maker Richemont rallied 0.99%, after reporting higher five-month revenue as the dollar’s strength boosted the value of sales in that currency. The company added that increased revenue from Europe is offsetting slower growth in China, where demand has eased.
On the downside, STMicroelectronics plunged 4% after UBS advised selling the stock, saying its share price doesn’t take account of continuing challenges to the business. Exane also cut its recommendation on the shares from “neutral” to “underperform”.
In London, commodity-heavy FTSE 100 dropped 0.25%, pressured by losses in oil and mining stocks.
Oil and gas major BP saw shares plummet 4.25%, extending earlier losses, while rival Anglo American tumbled 1%.
Mining giants BHP Billiton and Rio Tinto also pushed lower, with shares plunging 3.42% and 0.97% respectively, while shares in Evraz sank 2.34%.
Meanwhile, mobile phone group Vodafone erased earlier gains, dropping 0.60%, after Bernstein on Tuesday downgraded the stock, moving its recommendation from “outperform” to “market perform”.
In the financial sector, stocks remained mixed, as shares in Lloyds Banking jumped 1.16% and the Royal Bank of Scotland dipped 0.02%, while Barclays and HSBC Holdings retreated 0.44% and 0.79% respectively.
In the U.S., equity markets traded higher with the Dow Jones Industrial Average up 0.27%, S&P 500 higher by 0.07% drop, while the tech heavy Nasdaq is up by 0.04%.
In addition Wednesday, official data showed that retail sales in the euro zone fell 0.2% in July, in line with expectations, bringing the annualized rate of decline to 1.7%.
Investors are awaiting the U.S. ADP non farm employment numbers, the ECB press conference, as well as interest rate decisions from the euro zone and Great Britain on Thursday.
At the close of European trade, the EURO STOXX 50 added 0.22%, France’s CAC 40 climbed 0.20%, while Germany’s DAX 30 rose 0.46%.
Launching the equity rally, Bloomberg reported that the ECB is planning "unlimited, sterilized" bond buying, without setting bond yield targets. The plan called, the Monetary Outright Transaction proposal, is reported to be focused on government bonds with maturities of up to three years.
The ECB declined to either confirm or decline the report.
The euro has been supported recently by expectations that the ECB is set to announce more details of measures to help stabilize the region’s sovereign debt markets after its policy meeting on Thursday.
Meanwhile, a report showing that service sector activity in the euro zone contracted at a slightly faster rate than initially estimated in August added to fears that the bloc is set to enter a technical recession in the third quarter.
Financial stocks remained mixed, as shares in France and Germany’s biggest lenders, BNP Paribas and Deutsche Bank, added 0.14% and 0.07%, while Societe Generale dropped 0.34%.
Elsewhere, Swiss jewelry maker Richemont rallied 0.99%, after reporting higher five-month revenue as the dollar’s strength boosted the value of sales in that currency. The company added that increased revenue from Europe is offsetting slower growth in China, where demand has eased.
On the downside, STMicroelectronics plunged 4% after UBS advised selling the stock, saying its share price doesn’t take account of continuing challenges to the business. Exane also cut its recommendation on the shares from “neutral” to “underperform”.
In London, commodity-heavy FTSE 100 dropped 0.25%, pressured by losses in oil and mining stocks.
Oil and gas major BP saw shares plummet 4.25%, extending earlier losses, while rival Anglo American tumbled 1%.
Mining giants BHP Billiton and Rio Tinto also pushed lower, with shares plunging 3.42% and 0.97% respectively, while shares in Evraz sank 2.34%.
Meanwhile, mobile phone group Vodafone erased earlier gains, dropping 0.60%, after Bernstein on Tuesday downgraded the stock, moving its recommendation from “outperform” to “market perform”.
In the financial sector, stocks remained mixed, as shares in Lloyds Banking jumped 1.16% and the Royal Bank of Scotland dipped 0.02%, while Barclays and HSBC Holdings retreated 0.44% and 0.79% respectively.
In the U.S., equity markets traded higher with the Dow Jones Industrial Average up 0.27%, S&P 500 higher by 0.07% drop, while the tech heavy Nasdaq is up by 0.04%.
In addition Wednesday, official data showed that retail sales in the euro zone fell 0.2% in July, in line with expectations, bringing the annualized rate of decline to 1.7%.
Investors are awaiting the U.S. ADP non farm employment numbers, the ECB press conference, as well as interest rate decisions from the euro zone and Great Britain on Thursday.