Posted By Uma Rajagopal
Posted on June 11, 2024
European shares steady after French political tremors, eyes on Fed
By Shristi Achar A
(Reuters) -European shares were rangebound on Tuesday following losses in the previous session on political uncertainties in France, while investor attention turned to the U.S. Federal Reserve’s monetary policy meeting.
The continent-wide STOXX 600 was flat at 521.90 as of 0834 GMT.
France’s CAC 40 index gained 0.2%, rebounding from a more than 1% decline on Monday, as President Emmanuel Macron called for a snap election following a heavy trouncing of his allies in European Union parliamentary elections.
The yield on the French 10-year bond, however, hit its highest since November. [GVD/EUR]
“Our view on European growth picture has improved, and we do not think that the political uncertainty will change that view,” Mohit Kumar, chief economist Europe at Jefferies, said in a note.
The basic resources index led sectoral declines, down 1.6% as base metal prices took a hit on a weaker yuan. [MET/L]
Adding to the sector’s losses, Rio Tinto fell 2.2% after the mining giant said it would buy Mitsubishi Corp’s 11.65% stake in Boyne Smelters (BSL) for an undisclosed sum.
London’s FTSE 100 edged down 0.1% on miners’ weakness, even as the domestic labour market showed signs of cooling in April.
The focus will now be on the Fed’s policy decision on Wednesday, which will help markets gauge the timing of interest rate cuts in the world’s largest economy.
Meanwhile, European Central Bank policymaker Francois Villeroy de Galhau said the central bank will bring inflation back to its 2% target by next year, despite expected “noise” in the monthly data this year.
Among other stocks, Atos fell 11.1% as the French tech group picked an offer to restructure its debt led by anchor investor David Layani, which will massively dilute existing shareholders’ stake.
UCB gained 3.3% after J.P.Morgan upgraded the Belgian biopharmaceutical group to “neutral” from “underweight.”
Naturgy’s shares fell 11.9% after Spanish holding firm Criteria dropped its takeover plan with Abu Dhabi’s TAQA for the Spanish gas firm.
Spain’s IBEX index was down 0.5% underperforming the region’s bourses.
(Reporting by Shristi Achar A in Bengaluru; Editing by Sonia Cheema and Sohini Goswami)
