EUROPEAN shares ended lower on Wednesday (Jun 19), pressured by losses in real estate and technology stocks, while UK stocks were buoyed by metal miners as investors digested its inflation data.
The pan-European Stoxx 600 closed down almost 0.2 per cent, with the real estate sector falling 1.2 per cent and technology stocks dropping 1.1 per cent.
Basic resources stocks added 0.6 per cent, tracking a rebound in metal prices and leading sectoral gains.
Britain’s FTSE 100 reversed earlier losses to close up 0.2 per cent. Data showed UK inflation returned to its 2 per cent target in May for the first time in nearly three years, but underlying price pressures remained strong, meaning the Bank of England (BOE) is likely to wait longer before cutting interest rates.
“Economies are stagnant, but no worse. So the cost of being too dovish on inflation and seeing it re-accelerate is a greater risk for (the BOE) than keeping things tighter for another meeting or two in search of more data,” said Richard Flax, chief investment officer at Moneyfarm.
Market focus will now shift to interest rate decisions from central banks in Britain, Norway and Switzerland later this week.
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European shares saw sharp losses last week after France’s president called a snap election, with its high debt levels a source of concern for market participants.
The European Commission said France and six other countries should be disciplined for running budget deficits in excess of European Union limits, with deadlines for reducing the gaps to be set in November.
Latest polls suggest Marine Le Pen’s far-right National Rally party is leading ahead of the first round of the French parliamentary election.
The French benchmark CAC 40 closed nearly 0.8 per cent lower.
Travel and leisure stocks added 0.6 per cent to the pan-European index, boosted by a 1.4 per cent rise in Accor after Barclays upgraded the hotel group to “overweight” from “equal weight”.
SMA Solar Technology plunged 31 per cent after the German solar power parts supplier cut its profit guidance, citing political uncertainty.
Belgian metal recycling group Umicore jumped 3.4 per cent on a JP Morgan double upgrade.
Trading was light in the absence of US participants as markets there were shut for a public holiday. REUTERS
