FRANKFURT: European shares ended lower on Wednesday, pausing after weeks of strong gains, while investors monitored a raft of corporate earnings ahead of the US Federal Reserve’s rate decision later in the day.
The pan-European STOXX 600 index closed 0.5% lower, while other regional indexes also ended their day in the red.
European retail stocks led sectoral losses with a 2% fall. Data showed a more-than-expected decline in eurozone retail sales on a month-on-month basis in March.
Healthcare shares fell 1.8%. Shares of drugmakers AstraZeneca, GSK and Sanofi fell between 1.8% and 4.3% after the US FDA appointed on Tuesday agency critic Vinay Prasad as its top vaccine official.
European equities have recovered their sharp losses from early April, primarily because of several indications that US-China trade tensions could de-escalate.
“They’ve (European indices) had a strong recovery from the April lows at the beginning of this week. So we’re just having a little bit of breathing space,” said Fiona Cincotta, senior market analyst at City Index.
US Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China’s top economic official in Switzerland for talks this weekend. This could be the first step towards resolving a trade war ignited by US President Donald Trump.
Meanwhile, focus will be on the Fed’s interest rate decision later in the day. While traders expected the central bank to keep rates unchanged, they will look for comments on future policy moves.
“There is a little bit of nervousness ahead of the Federal Reserve interest rate decision later today, where potentially the Fed could adopt a more hawkish lean.”
Separately, German conservative leader Friedrich Merz was elected chancellor by parliament in a second round of voting after an unprecedented defeat on a first attempt got his coalition government off to a wobbly start.
Mark Branson, the president of Germany’s bank watchdog BaFin, said on Wednesday that the nation’s financial firms were in a strong position but that uncertainty would remain extremely high.
Comments
Comments are closed for this article.