European stocks flat as focus shifts to central bank meetings
European stocks struggled for direction on Tuesday, with banking shares declining ahead of the U.S. and UK central bank meetings this week, while Sweden’s H&M surged after reporting a betterthan-expected profit.
Shares in the world’s secondbiggest fashion retailer HMb.ST jumped 12.0%, on track for their biggest gain in almost six months, after its preliminary quarterly profit was better than expected and it signalled a better recovery from the pandemic.
The broader retail index rose 1.4%. Markets remained rangebound ahead of the conclusion of the U.S. Federal Reserve’s monetary policy meeting on Wednesday, the first since Chairman Jerome Powell unveiled a shift toward greater tolerance of inflation, effectively pledging to keep interest rates low for longer.
The Bank of England is also set to meet on Thursday, and likely to signal that it is getting ready to pump more stimulus into Britain’s coronavirus-hit economy. UK’s FTSE 100 rose 0.1%, barely reacting to data that showed unemployment rate rose 4.1% in the three months to July - the first time since the coronavirus lockdown began in March - although it was in line with economists’ expectations. The pan-European STOXX 600 was flat.
Euro zone banks slid 1.5%, the most among sectors. ECB board member Fabio Panetta became the latest to highlight risks from a strong currency, saying the results of its stimulus measures are “not fully satisfactory yet.”
Fiat Chrysler rose 5.6% and Peugeot maker PSA slipped 2.1% after the carmakers restructured the terms of their planned merger to conserve cash. Auto parts maker Faurecia slid 7.4% as PSA would postpone the planned spin-off of its 46% stake in the company, according to a new arrangement.
Europe’s mining sector rose 0.8% after data showed China’s industrial output accelerated the most in eight months in August, while retail sales grew for the first time this year, suggesting its economic recovery was gathering pace.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.