European stocks are set to extend the previous session's losses on Wednesday, as the Bank of Japan's inaction on market-calming measures signaled that global central banks will refrain from adding more stimulus to bolster economic growth. The focus now turns to the next week's meeting of the Federal Open Market Committee for clues to the Fed's future direction of monetary policy.
The U.S. economic calendar is light today ahead of key reports on retail sales, jobless claims and industrial production due later this week.
Closer home, Eurostat is slated to publish Eurozone industrial production data later in the session, with economists expecting output to remain flat month-over-month in April after rising 1 percent in March. Investors also await U.K unemployment data, with the claimant count rate forecast to remain unchanged at 4.5 percent in May.
Asian stocks are declining across the board, joining a global selloff in equities and commodities on worries about what will happen if the Fed starts tapering its asset purchases in the next few meetings.
Japan's Nikkei index is edging down marginally, as the yen strengthened, reflecting disappointment that the Bank of Japan held off on expanding its economic stimulus program. Meanwhile, government data showed that Japan's core private-sector machinery orders plunged a seasonally adjusted 8.8 percent in April to 723.3 billion yen from the previous month, falling for the second time in seven months.
The data suggests that companies are hesitant to increase capital spending despite Prime Minister Shinzo Abe's sweeping economic policies, popularly known as "Abenomics", to revive the world's third-largest economy. The markets in China, Hong Kong and Taiwan are closed for public holidays.
In domestic corporate news, Volkswagen AG announced that it will sell up to 1.2 billion euros ($1.6 billion) in convertible notes to strengthen its capital base and finance further growth including in the financial services division. Separately, the European car giant said it intends to recall around 26,000 cars in Australia, citing problems related to their gearbox.
Fraport AG's Frankfurt Airport reported a 0.4 percent rise in passenger traffic in May 2013 compared with last year.
Italian insurer Assicurazioni Generali SpA agreed to sell its 49 percent minority stakes in two Mexican companies to Mexico's Grupo Financiero Banorte for 649 million euros or $857.5 million.
Spanish fashion retailer Inditex SA reported a marginal rise in first-quarter profit to 438 million euros, helped by a 5 percent growth in sales.
European stocks fell to six-week lows on Tuesday on worries that the era of ultra-loose global monetary policy is on the wane. Investor sentiment was also impacted by the political turmoil in Turkey where anti-government protests strengthened. The benchmark indexes in the U.K., Germany, France and Switzerland fell between 0.9 percent and 1.5 percent.
U.S. stocks ended Tuesday's session sharply lower, as the lack of further action from the Bank of Japan to curb volatility in bond markets fueled concerns that global central banks may be less forthcoming with additional monetary stimulus. The Dow fell 0.8 percent, the tech-heavy Nasdaq lost 1.1 percent and the S&P 500 dropped a percent.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.