European Stocks Close Lower Awaiting Results of Fed Meeting
European Stocks Close Lower as Investors Wait for the Outcome the Fed’s Policy Meeting
On Wednesday, the European stocks closed lower. Investors wait for the outcome of the Fed Reserve’s latest policy meeting and economic forecasts.
The pan-European Stoxx 600 provisionary closed 0.2% lower with the majority of the sectors and major bourses in the red. The worst performers were the travel and leisure shares, down over 2%.
The market focus now shifts to the Fed’s latest policy meeting. Stock markets on Wall Street were mostly lower, with investors waiting for the Fed to clarify the U.S. economic state.
The Fed’s two-day meeting concludes on Wednesday with the release of a policy statement and quarterly summary of economic projections, followed by Jerome Powell’s news conference at 2.30 pm EST.
The Fed may not make significant policy changes. Especially with its benchmark rate close to zero and asset purchasing programs in progress.
However, investors will be looking out for hints on how long its current policy will hold, and for its economic forecast and interest rates, which were first since late last year.
On Wednesday morning in Europe, Inditex reported a net income loss of 409 million euros between February and April. It includes a 308 million euro provision for its store optimization program.
The world’s largest fashion group said the coronavirus pandemic had materially affected them. But their online sales rose 50% across the period.
On Wednesday, the Organization for Economic Cooperation and Development (OECD) warned that the pandemic was on track to cause the worst peacetime recession in 100 years. Moreover, the OECD warned that the second wave of infections could cause the global economy to contract by 7.6% in 2020.
Individual share price action
In the Netherlands, Just Eat Takeaway, a food-based delivery firm, plunged 13% to the bottom of the Stoxx 600 following a confirmation that it was in advanced talks to merge with the U.S. rival Grubhub.
The news came after CNBC reported that Uber would pull out of deal talks with Grubhub. This was because of antitrust concerns.
On the opposite end of the blue-chip index, Sweden SEB rose almost 6%. It came after Sweden’s central bank said it would conclude its investigation into the bank’s management and the controls of anti-money laundering measures in the Baltics.
