Europe open: Stocks subdued ahead of ECB rate decision, UK budget

The pan-European Stoxx 600 index was up 0.3% at 497.73 in early deals with major bourses in the region largely lower. Asian shares were boosted as Japan’s Nikkei 225 passed 40,000 points and set a record high, following in the footsteps of the US S&P 500 and Nasdaq indices last Friday.

ECB policymakers are expected to keep rates at 4% when they meet on Thursday, but are expected to say the outlook is looking more conducive to rate cuts.

In the UK eyes will be on Finance Minister Jeremy Hunt who will on Wednesday deliver what is likely his final budget ahead of a general election which must be called this year.

Members of the ruling Conservative Party, trailing the opposition Labour Party by 20 points in the polls, have been leaning on Hunt to offer up tax cuts as they attempt to cling on to power after 14 years in government.

However, bodies such as the International Monetary Fund have warned that such pre-election giveaways would be irresponsible given the UK’s debt levels and a further round of severe austerity cuts to public services Hunt has planned for the coming years.

“What appears clear is that (Hunt) has a lot less fiscal room to play with than he hoped … warnings are coming thick and fast, from the Office of Budget Responsibility and the IMF, about the financial irresponsibility of offering big sweeteners,” said Hargreaves Lansdown analyst Susannah Streeter.

In equities news, shares in Spanish pharma company Grifols continued their roller-coaster ride from last week, with the shares down 7%.

Delivery Hero gained after the online takeaway food company announced a financing deal and other moves on its debt.

Reporting by Frank Prenesti for Sharecast.com