PARIS: European shares slipped on Wednesday as concerns about whether the United States can avoid a debt default weighed on sentiment, along with a slew of downbeat corporate updates.
The continent-wide STOXX 600 eased 0.2%, with defensive sectors such as food and beverage, utilities and real estate firms leading declines.
A cautious mood prevailed in global markets as US President Joe Biden looked set to continue talks with congressional leaders on raising the country’s debt limit later this week, with House Speaker Kevin McCarthy vowing to avoid a default.
“We’re still a little way off from the deadline and there are hopes that we could get some kind of deal over the weekend,” said Chris Beauchamp, chief market analyst at IG Group.
“It will affect US markets first and European markets will go with it, and that’s how we expect the second half of May to play out. It’s never a great month for stocks.” European shares have traded in a tight range this month as investors assess the outlook for European and US interest rates and the risk of a US default.
German lender Commerzbank AG fell 3.8% on Wednesday after its net interest income forecast for the full year fell short of analysts’ expectations.
Euronext NV dropped 3.0% after the stock exchange operator reported a fall in first-quarter revenue and income, while London Stock Exchange Group was down 2.7% after an investor consortium including US buyout firm Blackstone and Thomson Reuters sold shares worth about 2.7 billion pounds ($3.41 billion).
UBS Group AG rose 1.1% after the Swiss bank said it expects a financial hit of about $17 billion from the takeover of Credit Suisse Group AG but also estimated a one-off gain from so-called “negative goodwill” of $34.8 billion.
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