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European Stocks Turning In Mixed Performance Ahead Of Fed Policy

stockmarkets jan04 16sep20 lt

After a slightly sluggish start and a subsequent modest uptick, European stocks were turning in a mixed performance in early afternoon trades on Wednesday with investors largely making cautious moves ahead of the Federal Reserve's monetary policy announcement.

The Federal Reserve is widely expected to keep interest rates near zero for a prolonged period. The central bank's views on inflation, unemployment and overall economic growth are in focus.

Two other central banks, the Bank of Japan and the Bank of England, are scheduled to announce their policies on Thursday.

Concerns about the likely impact of a no-Brexit deal and worries about coronavirus pandemic contiuned to weigh on sentiment.

The pan European Stoxx 600 was up 0.3% at 372.07. The U.K.'s FTSE 100 slid 0.22% to 6,091.92 after having advanced to 6,119.24 earlier. Germany's DAX was down marginally at 13,214.25, while France's CAC 40 was lower by 0.1% at 5,063.35. Switzerland's SMI was fairly steady with a gain of about 0.33%.

The markets also digested news from Japan, where Yoshihide Suga got elected as the Prime Minister.

In the U.K. market, Kingfisher, Bunzi, Royal Mail, DCC, CRH and 3i Group gained 2 to 3.5%. BHP Group, Fresnillo, Ocado Group and Ferguson also rose sharply.

On the other hand, Rolls-Royce Holdings declined by about 7%. IAG, EasyJet, Carnival, Meggitt, Morrison Supermarkets, HSBC Holdings, Barclays and TUI were down 2 to 4%.

In France, Hermes International and WorldLine gained 3% and 2.7%, respectively. Dassault Systemes, Kering, Atos, Capgemini and STMicroElectronics were moving up 1 to 1.4%, while Accor, Renault, Michelin, Peugeot, BNP Paribas, Credit Agricole and Societe Generale were down 1.4 to 2.8%.

In the German market, Fresenius, Adidas, RWE, Deutsche Post and SAP gained 1 to 1.5%, while Deutsche Bank declined about 2.5%, and Lufthansa, Thyssenkrupp, Continental and Allianz lost 1 to 1.7%.

On the economic front, the euro area trade surplus increased for the third straight month in July to reach pre-pandemic levels, data published by Eurostat showed. Exports grew by a seasonally adjusted 6.5% and imports advanced 4.2% on a monthly basis in July. As a result, the trade surplus increased to EUR 20.3 billion from EUR 16.0 billion in June.

Exports of goods decreased 10.4% annually and imports dropped 14.3%. Consequently, the trade surplus climbed to an unadjusted EUR 27.9 billion in July from EUR 23.2 billion in the same period last year.

According to a report from the Office for National Statistics, UK inflation slowed in August, easing to a less-than-expected 0.2% from 1% in July. Prices were forecast to climb 0.1%.

Month-on-month, consumer prices dropped 0.4%, offsetting a 0.4% rise in July. Economists had forecast a 0.6% fall.

Falling prices in restaurants and cafes, arising from the Eat Out to Help Out Scheme, resulted in the largest downward contribution to the annual inflation, the ONS reported. Meanwhile, upward contributions came from games, toys and hobbies, accommodation services and road transport services.

Excluding energy, food, alcoholic beverages and tobacco, core inflation halved to 0.9% from 1.8%. This was also below economists' forecast of 0.6%.

Another report from the ONS showed that output prices fell 0.9% annually in August, falling for the third straight month. Prices were expected to fall 0.7%.

Compared to July, output prices remained flat, while economists' had forecast prices to grow 0.2% after climbing 0.3% in July.

The Czech Republic's producer prices declined for the fifth straight month in August, figures from the Czech Statistical Office showed.

The industrial producer price index decreased 0.5% year-on-year in August, following a 0.1% decline in July. Economists had expected a 0.1% fall.

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