Major European Markets Close Slightly Down After Lackluster Session
European stocks closed slightly lower on Monday after a somewhat lackluster session as investors stayed wary of creating fresh positions amid fading hopes of an early interest rate cut by the Federal Reserve and a few other central banks.
Comments from Fed Chair Jerome Powell that the bank is unlikely to cut interest rates next month during an interview with ’60 Minutes’ on Sunday weighed on sentiment.
Powell suggested the strength of the U.S. economy even amidst elevated rates will allow the Fed to proceed carefully. ‘With the economy strong like that, we feel like we can approach the question of when to begin to reduce interest rates carefully,’ Powell said.
‘We want to see more evidence that inflation is moving sustainably down to 2%,’ He added. ‘Our confidence is rising. We just want some more confidence before we take that very important step of beginning to cut interest rates.’
The pan European Stoxx 600 edged down 0.05%. The U.K.’s FTSE 100, Germany’s DAX and France’s CAC 40 ended down 0.04%, 0.08% and 0.03%, respectively. Switzerland’s SMI climbed up 0.31%.
Among other markets in Europe, Austria, Finland, Iceland, Norway, Poland, Portugal, Spain and Sweden climbed higher.
Denmark, Greece, Netherlands, Russia and Turkiye closed higher, while Belgium ended flat.
In the UK market, top performers included Ocado Group, which surged nearly 4%, and GlaxoSmithKline, which advanced by about 3%. On the other hand, Ashtead, JD Sports Fashion, and Howden Joinery were among the companies that lost 2 to 5%.
Lloyds Bank also ended down by about 1.4% after a report from the Financial Times claimed that Iran evaded sanctions using accounts at Lloyds and Santander. The British lender stands accused of allowing covert money transfers.
In Germany, Deutsche Bank ended down 2.7%, while Beiersdorf climbed about 4.3%. In France, Alstom ended down nearly 4%, and Societe Generale closed lower by about 1.4%.
Eurozone economic data showed Germany’s exports fell 4.6% in December, and imports fell 6.7%. Eurozone producer prices also fell by 10.6% year-over-year in December.
Despite these numbers, euro area investor confidence strengthened for the fourth straight month in February, according to a survey conducted by Sentix. However, the level of confidence remains weak due to the negative economic pull from Germany.
In the UK, the service sector grew at its fastest pace in eight months in January, with new orders continuing to rise, according to S&P Global’s survey results.
Overall, while major European markets closed slightly lower, there were individual winners and losers within each market. The uncertainty surrounding interest rate cuts and ongoing economic data will likely continue to influence investor sentiment in the coming days.
