PARIS: Europe’s STOXX 600 ended flat on Wednesday as investors shied away from risk-taking amid more warfare in the Middle East, although advancing energy shares kept a lid on losses.
The pan-European STOXX 600 held steady at 521.14 points at close after trading near flat throughout the session.
The energy sector gained 1.6% and clocked its best session in more eight weeks as oil prices rose following Iran’s missile attack on Israel and Israeli and US vows of retribution.
The hostilities also boosted defence companies including Germany’s Rheinmetall and Britain’s BAE Systems, which rose more than 1% each, while Sweden’s Saab added 2.5%.
Euro area government bond yields, which move inversely to prices, rose a day after long-dated yields posted their biggest daily fall since mid-June. Utilities, often traded as a bond proxy, were the lead decliner amongst major STOXX sectors, down 1.6%.
On the data front, euro zone unemployment for August stood at 6.4%, matching estimates of analysts polled by Reuters.
“The low rate remains remarkable given the sluggish economic environment that the euro zone has been in since late 2022,” Bert Colijn, chief economist, Netherlands at ING said.
“But labour demand remains high despite a weak economic environment.” Euro zone growth could be weaker in the near term than the European Central Bank (ECB) now expects but the recovery should still pick up pace later on, ECB Vice President Luis de Guindos said. Earlier in the day, Citigroup said it now expects the ECB to cut interest rates by 25 basis points in its October meeting, with subsequent cuts expected in December and through the start of 2025.
The ECB will meet in less than two weeks to take a call on borrowing costs.
Among other headlining stocks, Britain’s JD Sports Fashion lost 6.1% after US firm Nike withdrew its annual outlook. The British sportswear retailer beat consensus forecast for first-half profit.
Sweden-based automaker Volvo Cars said its sales rose by 1% year-on-year in September to 62,458 cars. Its shares, however, slipped 6.6%.
Source: Brecorder
