European stocks closed lower on Wednesday as investors made cautious moves, digesting the latest batch of economic data and looking ahead to the Federal Reserve’s interest rate move due later in the day.
The U.S. central bank is likely to deliver the first cut to interest rates in more than four years but there is a debate about the size of reduction after data showed U.S. retail sales unexpectedly ticked up in August in a sign of ongoing consumer resilience.
The Bank of England is scheduled to announce its monetary policy on Thursday.
The pan European Stoxx 600 ended down 0.5%. The U.K.’s FTSE 100 dropped 0.68% and France’s CAC 40 closed down 0.57% and Germany’s DAX edged down 0.08%, while Switzerland’s SMI settled lower by 0.5%.
Among other markets in Europe, Belgium, Denmark, Greece, Iceland, Netherlands, Norway, Poland, Portugal, Russia, Spain and Sweden closed weak.
Austria and Turkiye ended higher.
In the UK market, JS Sports Fashion lost 0.6%. Rentokil Initial ended down 4.59%. Legal & General ended nearly 3% down. The financial services company has agreed to sell its U.K. house builder Cala Group for an enterprise value of 1.35 billion pounds ($1.78 billion).
Diploma, Halma, Phoenix Group Holdings, Convatec Group, Spirax Group, Howden Joinery, Natwest Group, Endeavour Mining, Next and Diageo ended lower by 1.6 to 3%.
Reckitt Benckiser climbed about 1.3%. Media reports suggest that the British consumer goods giant has started early discussions with potential suitors for a sale of its homecare assets.
RightMove, Kingfisher, Centrica, WPP, Standard Chartered, IHG, Vodafone Group and Burberry Group gained 0.5 to 1.3%.
In the German market, Puma dropped nearly 2.5%. Brenntag, Symrise, RWE, E.ON and Beiersdorf ended down 1 to 1.4%.
Siemens Energy, BASF, BMW, Bayer, Zalando, Commerzbank, Continental and Sartorius gained 1.2 to 2.5%.
In the French market, LVMH, Pernod Ricard, Edenred, Air Liquide, STMicroElectronics, Legrand and Kering lost 1 to 2%.
Thales climbed more than 2%. Carrefour, Bouygues, ArcelorMittal and Orange ended up 0.6 to 1%.
In economic news, Eurostat confirmed that the euro area annual inflation rate was 2.2% in August 2024, down from 2.6% in July.
Eurozone construction output stalled in July after rising 0.6% growth in June, which was the first rise in four months. On a yearly basis, the decrease in construction output deepened to 2.2% in July from 1.3% a month ago.
The U.K. headline consumer inflation gained 2.2% from a year ago in August, the same rate as seen in July, the Office for National Statistics reported.
However, price growth in the services sector picked up, cementing expectations that the Bank of England will pause interest rate cuts on Thursday. Services inflation rose to 5.6% from 5.2%.
UK house prices grew at a slower pace in July, data published by the Office for National Statistics revealed. Average house prices climbed 2.2% on a yearly basis after June’s 2.7% growth. This was the fifth consecutive annual increase in prices, following eight months of falls.
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