European shares end flat on corporate updates
Major regional benchmarks were largely trading in the red, with ones in Germany and Spain down 0.5% and 0.2% respectively
European shares ended flat on Wednesday as investors parsed a slate of corporate announcements.
The pan-European Stoxx 600 closed flat at 578.17, extending its pattern of trading in tight ranges during the past few sessions.
Major regional benchmarks were largely trading in the red, with ones in Germany and Spain down 0.5% and 0.2% respectively.
An index of automakers led losses, down 1.5%, dragged lower by a 4.8% drop in luxury carmaker Ferrari. Morgan Stanley initiated coverage with an ‘equal weight’ rating, while Jefferies lowered its target price on the stock.
Industrial stocks that buoyed the market in recent sessions dropped 0.35%, with defence firms weighing. The European aerospace and defence index shed 0.8% after adding more than 2% in the previous two sessions.
Vinci shed 3.1% after BNP Paribas downgraded the French infrastructure and concessions group to “neutral” from “outperform”, with the brokerage forecasting a muted 2026 for European transport and infrastructure firms.
Construction and materials index dropped 0.8%.
Aegon was the worst-performing stock for the day, losing more than 10% after the insurer said it would move its legal domicile and head office to the US from the Netherlands.
Market attention was also on the U.S. central bank’s rate decision later in the day, where the bank is expected to cut interest rates by 25 basis points.
However, comments from bank Chair Jerome Powell will be scrutinised for clues on how the bank will approach monetary policy next year amid sparse economic data and the U.S. administration’s push for lower rates.
This may be another hawkish cut, but we definitely do not think the rate-cutting cycle is over, said Guy Stear, head of developed markets strategy research at Amundi.
We expect a pause in Q1, but think the Fed will cut twice in Q2 as the effects of the US budget will lead to cuts in the spending habits of the less affluent US consumer, he added.