LONDON – European stocks closed slightly lower on Wednesday as investors assess recovery hopes and economic data.
The pan-European Stoxx 600 ended the session down 0.2%, with healthcare stocks losing 0.9% to lead the losses while the insurance sector gained 0.6%.
The UK FTSE 100 resisted the downtrend to climb 1%. The strong export index was boosted by a weakening of the pound against the dollar and optimism about rapid progress in vaccine deployments across the UK.
Major US averages retreated from Tuesday’s highs to end the session in the red despite strong economic data – including the March jobs report which beat expectations – fueling the rise in equities over the years. last sessions.
The top three US averages are emerging from their fourth consecutive quarter of gains as the economic recovery from Covid-19 accelerates. US stocks struggled to move on Wednesday, as attention turned to the minutes of the latest Federal Reserve meeting.
“We expect the minutes to confirm that the Fed does not plan to begin normalization any earlier than it committed to, which could allow stock indexes to continue to move towards the negative. north, ”said Charalambos Pissourous, senior market analyst at JFD Bank.
Markets are also digesting the European Medicines Agency’s finding that there is a possible link between the coronavirus vaccine developed by AstraZeneca and the University of Oxford and rare blood clotting problems in adults who have received the drug. vaccine.
AstraZeneca shares plunged 1.2% at market close on Wednesday.
On the data front, IHS Markit’s latest Eurozone Composite Purchasing Managers (PMI) Index showed on Wednesday that trading activity in the bloc rebounded in March despite reintroducing restrictions in several countries.
The composite PMI, which combines manufacturing and services and is seen as a useful indicator of economic health, stood at 53.2, down from 48.8 in February and above the flash estimate of 52, 5.
Sébastien Galy, senior macro strategist at Nordea Asset Management, said Wednesday would be an interesting test as there is “little to move the markets” apart from a decision by the Reserve Bank of India, European PMIs and Fed minutes.
“It is in the silence that one can best observe the underlying mechanisms. Will the dollar rise as bond curves continue to steepen and stocks recover slightly, which seems to be the most likely scenario? ” Said Galy.
“The temptation to reach new highs in the stock market is a return of worries about valuations and therefore a rotation towards value, but with a reaction function from the Fed suggesting that it will be well on hold until 2023. , reflation trade is simply loosening more fundamentals boosted by a cyclical recovery. “
In terms of the price movement of individual shares, French utility EDF climbed 10.5% after Reuters announced, citing union sources, that the French government was planning a buyout by minority shareholders valued at around $ 10 billion. ‘euros ($ 11.87 billion).
At the bottom of the European blue chip index, Dutch tech investment firm Prosus slipped 4.6% after announcing plans to sell a 2% stake in Tencent.
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