Europe close: Fedspeak weighs on shares
European equity markets finished on a mixed note on Wednesday, weighed down by hawkish Fedspeak and a drop in crude oil futures, although travel-related stocks were back in the black.
The benchmark DJ Stoxx Europe 600 index slipped 0.07% to 340.07, while Germany’s DAX was 0.33% higher to 10,022.93 but France’s CAC 40 drifted lower by 0.18% to 4,423.98.
Travel and leisure issues recovered from the previous day’s losses; Thomas Cook pushed up 2.9%, Ryanair added 1.7%, InterContinental Hotels gained 0.76%, EasyJet rose 0.73%, Accor edged up 0.2%.
"As terrible as the events in Brussels have been, economic activity is typically pretty resilient to terrorist attacks," Francesca Peck, IHS Global Insight economist, said in a research note sent to clients.
Oil prices were lower as investors reacted to a large jump in the headline figure for weekly US crude oil inventories. West Texas Intermediate was down 3.34% to $40.11 a barrel and Brent crude was off 2.63% at $40.72.
On Tuesday, European equities shook off a weak start to end little changed as investors largely shrugged off terrorist attacks in Brussels which left over 30 people deal and scores injured.
Nevertheless, investors continued to keep an eye out for any headlines related to the attacks.
Earlier on Wednesday, Belgian newspaper DH said police had arrested suspect Najim Laachraoui in the Aderlecht district of Brussels but it later withdrew the claim, saying the man arrested was not Laachraoui.
The other two suspects, believed to have died when the bombs went off, were named as brother Khalid and Ibrahim el-Bakraoui.
In remarks to Bloomberg TV on Wednesday, the president of the Federal Reserve bank of St.Louis, James Bullard, chimed in with recent warnings from his colleagues at the Atlanta and San Francisco, saying the US central bank should consider an interest rate hike in April.
At last count, Fed funds futures were assigning a 74% probability to a single 25 basis Fed rate hike by December, as opposed to 68% at the end of the previous week.
On the corporate front, shares in Credit Suisse were in the green as investors welcomed its plans to accelerate cost savings and cut 2,000 jobs in the global markets business.
French luxury brand Hermes was also on the front foot as its full year profit surpassed analysts’ expectations, with operating profit up 19% to €1.54bn.
Stock in B&Q owner Kingfisher rallied as its full year pre-tax profit beat analyst’s expectations and the company said its turnaround plan was on track.
Pharmaceuticals giant AstraZeneca nudged lower after saying its Brilinta drug missed its target during a trial in stroke patients, proving less effective than aspirin.