Europe close: ECB jitters drag on stocks
European stocks were lower on Wednesday following losses overnight in Asia and the US and nerves ahead of a European Central Bank meeting on Thursday which could see rate-setters slow their emergency bond purchases.
The pan-European Stoxx 600 index was down 1.06% to 467.87. All major regional bourses were lower alongside with the Dax off by 1.47% to 15,610.28 and the Cac-40 retreating 0.85% to 6,668.89.
Also dampening the mood were remarks from St.Louis Fed chief James Bullard in which he shrugged off a slowdown in hiring and argued in favour of starting to taper bond purchases before year-end.
"There is little sign that the losses in European markets can be reversed soon, especially with concerns rising about the ECB’s attitude at tomorrow’s meeting," said IG chief market analyst Chris Beauchamp.
"Losses prevail across global indices this afternoon, helped along the way by James Bullard’s comments about pushing ahead with a taper in Fed asset purchases despite the recent weaker NFP print. The quiet summer is definitely over, and so far September is living up to its reputation as a tough month for stock markets."
The ECB is expected to announce a cut in bond buying on Thursday, with forecasts of purchases under the Pandemic Emergency Purchase Programme falling to as low as €60bn a month from the current €80bn.
In equity news, shares in B&M European Value Retail topped the Stoxx with a rise of 6.92% after the company said it expected interim core earnings to be ahead of analysts’ forecasts on the back of stronger gross margins.
The owner of convenience retail stores said adjusted earnings before interest, taxes, depreciation and amortisation for the six months to September 25 to be £275m - £285m.
Swedish investment company EQT fell 3% after a share placing deal. Car maker Stellantis dropped after Dongfeng Motor Hong Kong said it had sold shares in the carmaker for about €600m.
Shares in French drugmaker Sanofi slipped after it agreed to buy US biopharmaceutical company Kadmon Holdings in a $1.9bn deal.
British industrial technology company Smiths Group rose 3% after it agreed to sell its medical unit to US-based ICU Medical for $2.4bn.
Morrisons edged up as the company said it is in talks with the Takeover Panel about launching an auction process for the supermarket chain after Fortress Investment Group and Clayton Dubilier & Rice failed to declare their bids final.
Homewares retailer Dunelm shot higher after it said 2022 full-year profits would be "modestly" ahead of expectations as it posted a strong rise in 2021 earnings, driven by online sales during the Covid pandemic.