European Stocks Weaken Post Fed; BOE in Focus

imageStock Markets1 hour ago (Sep 17, 2020 03:57AM ET)

(C) Reuters.

By Peter Nurse

Investing.com – European stock markets weakened Thursday, following the U.S. Federal Reserve’s decision not to provide additional stimulus at its latest meeting.

At 4 AM ET (0800 GMT), the DAX in Germany traded 1.1% lower, the CAC 40 in France fell 1% and the U.K.’s FTSE index was down 0.8%.

The Federal Reserve kept rates unchanged Wednesday, and signalled that interest rates would stay close to zero at least through 2023, to support the economy’s ongoing recovery.

However, in its first meeting since adopting a more tolerant stance on inflation, the U.S. central bank gave no indication of when it might increase its monthly bond purchases, disappointing some investors hoping for further largesse.

The focus now shifts to the Bank of England, which is expected to announce its latest policy decision at 7 AM ET (1100 GMT).

“The BOE’s not done,” said James Rossiter, an economist at TD Securities, reported by Bloomberg. “More quantitative easing is necessary and this meeting does provide a bit of an opportunity to shift things in that direction. The big cliff coming is on the employment side.”

In corporate news, Next (LON:NXT) stock rose 2.6% after the U.K. fashion chain raised its profit outlook for the full year for a second time. It said business had proven “more resilient than we expected” in the first half, despite a 34% fall in sales and a pretax loss. Rivals Inditex (MC:ITX) and H&M (ST:HMb), had both reported a return to profitability in the latest three months.

Trainline (LON:TRNT) also detailed the extent of the hit from the measures taken to curb the spread of Covid-19, with sales down 81% in the first half of fiscal 2021. That said, the U.K.-based company said trading started recovering in the second quarter, with the relaxation of travel restrictions. Its stock rose 2.1%.

IG Group (LON:IGG) soared 5.6% after the online trading platform posted a substantial jump in first-quarter revenue, benefiting from high levels of trading activity during these turbulent times.

On the flip side, Natixis (PA:BFCEp) stock dropped 2.3% after its H20 Asset Management arm had to write down the value of Windnorst bonds by some 60%.

Oil prices fell Thursday, rebalancing after recent strong gains as producers in the Gulf of Mexico took steps to resume output in the wake of Hurricane Sally.

A panel of the Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, meets on Thursday to review the market, but is not expected to announce any market-moving measures.

U.S. crude futures traded 0.8% lower at $39.84 a barrel, while the international benchmark Brent contract fell 0.7% to $41.91. Both benchmarks saw gains of close to 5% during the previous session.

Elsewhere, gold futures fell 1% to $1,951.40/oz, while EUR/USD traded 0.4% lower at 1.1768.

European Stocks Weaken Post Fed; BOE in Focus

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>