European stocks are seen opening largely unchanged on Wednesday as investors seek to take some profits off the table following a three-week rally that took key benchmark indexes to multi-year highs.
Trading will likely remain range-bound amid lack of fresh catalysts and another relatively quiet day on the U.S. economic front. Closer home, the U.K. economy has finally surpassed the pre-recession peak it reached in January 2008, the National Institute of Economic and Social Research estimated. According to the think tank, the economy grew by 0.9 percent in the three months to May, following the 1.1 percent growth in the three months through April.
Asian stocks are trading mostly lower as investors fret over stock valuations and global growth prospects as the World Bank cut its global growth forecasts, citing concerns over Ukraine, political strife in several middle-income countries and bad winter in the United States. In its Global Economic Prospects report released yesterday, the World Bank said it expects the global economy to expand by 2.8 percent in 2014, down from its previous projection of 3.2 percent.
The World Bank also fretted about the possibility of financial volatility in emerging markets once the Federal Reserve starts to raise interest rates.
The euro is coming under mounting selling pressure as a widening gap between yields for government debt in the U.S. and the euro zone on the back of last week's ECB policy action made the greenback more attractive for investors seeking safe-haven assets.
In corporate news, French high-end cognac maker Remy Cointreau said it has appointed Valérie Chapoulaud-Floquet as its new Chief Executive Officer following the departure of Frédéric Pflanz.
Heidelberger Druckmaschinen AG reported pre-tax profit of 2 million euros for the financial year 2013/14, compared to a loss of 126 million euros a year ago.
Spanish fashion retailer Inditex SA reported lower first-quarter 2014 net income of 406 million euros versus 438 million in the prior-year quarter.
The major European markets closed mostly higher on Tuesday as investors digested solid industrial output readings from Italy, France and the U.K. France's CAC 40 edged up 0.1 percent and the U.K.'s FTSE 100 ended little changed with a negative bias, while the German DAX rose 0.2 percent to close at a record high above 10,000 for a second day in a row.
U.S. stocks ended mixed showing little change overnight, as investors found few reasons to keep buying after a four-session winning streak that lifted the Dow and S&P 500 to record highs. Chinese inflation data and the central bank's push to boost flagging growth by cutting the reserve requirements for some banks helped to limit the downside for the markets.
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