Europe close: Stocks little changed ahead of Fed minutes

European stocks wavered in a tight range on Wednesday but closed near their lows of the session as bond prices retreated while investors waited for the release of the latest Federal Reserve minutes later in the day, with Ericsson under the cosh after a profit warning.

The benchmark Stoxx Europe 600 slipped 0.47%, Germany’s DAX was down 0.51% and France’s CAC 40 was 0.44% lower.

In currency markets, the pound was up 0.87% versus the dollar at $1.2228 on news that Prime Minister Theresa May has agreed to a debate about her plans for taking the UK out of the European Union, raising hopes that this would help curb her push for a hard Brexit.

Spreadex’s Connor Campbell said: “It’s not a formal vote on the issue, but it’s better than nothing, and has momentarily put to bed the fears of a hard exit from the EU, allowing sterling a chance to recapture some lost ground. Of course the pound is barely above $1.22 and €1.10, so it’s hardly a champagne-worthy rise. Nevertheless those traders that have been desperately fishing about for sterling’s bottom may be breathing a sigh of relief this morning.”

Oil prices were fairly steady, with West Texas Intermediate slipping 1.44% to end at $50.07 a barrel and Brent crude off 1.11% to $51.83.

On the corporate front, shares in Swedish telecom equipment firm Ericsson got slammed after it warned on profit, saying third-quarter earnings will be “significantly lower” than expected amid falling sales in its core mobile-network equipment business. Peer Nokia also fell sharply.

In London, miner Fresnillo slipped back after a quarterly production report, while shares in Premier Foods tanked after it warned that first-half trading profit was likely to be slightly below the previous year and posted a drop in second-quarter sales due to warmer weather.

Lloyds was under pressure after the bank revealed plans to axe 1,230 jobs as it looks to cut costs and improve shareholder returns as part of its three-year strategy.

On the upside, chemical maker BASF advanced after it reported a smaller-than-expected drop in quarterly profit, while E.ON and RWE edged up following a report the German government has reached an agreement with the utility industry on nuclear decommissioning.

On the macroeconomic calendar, figures from Eurostat showed eurozone industrial production rebounded surprisingly strongly in August.

Industrial production among euro area countries bounced back by 1.6% from the previous month, beating forecasts for a 1.1% rise following the 1.1% decline in July.

In the wider European Union, production was up 1.4%.

Compared to last year, Eurozone industrial production was up 1.8%, ahead of expectations for a 1.5% improvement.

Eurostat said the increase in euro area was due to production of durable consumer goods rising by 4.3%, capital goods by 3.5%, energy by 3.3% and intermediate goods by 1.4%, while production of non-durable consumer goods fell by 0.6%.

The latest FOMC minutes are at 1900 BST. Societe Generale said they could reveal the extent of the discord at the Fed.

“There were three dissenters but also three officials who now see no rate hike this year versus none who took that stance in June. So it will be important to gauge how far apart officials are.

“The minutes are likely to reveal a divide between those who think the Fed risks falling behind the curve and those who opt for a risk-management approach to policy, and it will be important to gauge which direction the centre of the FOMC is leaning towards.”