July 23, 2024

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European Shares Inch Lower Ahead Of BoE Meeting

2 min read

European stocks drifted lower on Wednesday as investors watched the latest political developments in the country and reacted to hawkish Fed comments.

The risk premium on French bonds held steady despite lingering worries about the country’s debt path and fiscal situation.

National Rally leader Jordan Bardella said he will not become prime minister if his party doesn’t get a resounding victory in France’s snap election.

Polls indicate Marine Le Pen’s party is best placed to become the largest group in the National Assembly, but projections show the party is set to fall short of an outright majority.

The pan European STOXX 600 was marginally lower at 514.53 after climbing 0.7 percent on Tuesday.

The German DAX, France’s CAC 40 and the U.K.’s FTSE 100 were down between 0.2 percent and 0.4 percent.

The dollar held steady after several Federal Reserve officials urged patience on interest-rate cuts.

Sterling edged higher after data showed U.K. inflation has hit the 2 percent target for the first time in three years, delivering a fillip to Prime Minister Rishi Sunak ahead of the parliamentary election.

Consumer price inflation softened to 2.0 percent in May, as expected, from 2.3 percent in April, data from the Office for National Statistics showed.

Capital Economics’ economist Ruth Gregory said the fall in inflation to 2.0 percent in May probably won’t be enough to persuade the Bank of England (BoE) to cut interest rates from 5.25 percent on Thursday.

The BoE had kept the interest rate unchanged over the last six straight meetings. The current 5.25 percent is the highest since early 2008.

In corporate news, British precision instrumentation and controls group Spectris plunged 8.5 percent after issuing a profit warning.

Warhammer maker Games Workshop soared 8.4 percent after saying it expects continued revenue and profit growth across the business this year.

Vodafone rose 1.3 percent after the telecom group sold an 18 percent stake in Indus Towers to repay debts.

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2024-06-19 05:27:57

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