European stocks flat as tech, miners drag ahead of U.S. Fed decision
(Reuters) – European stocks were largely flat on Wednesday due to losses in technology and mining sectors and as investors stayed on the sidelines ahead of the U.S. Federal Reserve’s policy decision.
The pan-European STOXX 600 index was down 0.02% following losses in Asian markets and Wall Street.
U.S. software company Microsoft’s bumper results overnight did little to help Europe’s tech sector, which dropped 0.9%.
Miners took a hit as Fresnillo Plc forecast lower gold output for the current year.
Meanwhile, global coronavirus cases surpassed 100 million, according to a Reuters tally, and Europe, the worst-affected region in the world, is reporting a million new infections about every four days.
AstraZeneca’s Chief Executive said the European Union’s late decision to strike a contract with the drugmaker to supply COVID-19 vaccines meant the company did not have enough time to iron out glitches in setting up production lines.
“Equity markets are mixed even with a positive earnings season in the United States amid fears regarding the rollout of the vaccine and production capabilities,” Sebastien Galy, macro strategist at Nordea Asset Management said in a note.
“Signs of frothiness abound, but we are yet to get a clear trigger in the growth style.”
Drugmaker Evotec and battery maker Varta rallied for a second session on market talks about Melvin Capital Management being forced to unwind its short positions after some of its investments turned sour.
Few if any changes are expected to the U.S. Fed’s policy statement and no new economic forecasts are scheduled to be released, but Fed Chair Jerome Powell is likely to renew a commitment to ultra-easy monetary policy.
French luxury group LVMH rose 1.2% as booming sales at fashion brands like Louis Vuitton, particularly in China, helped to cushion the impact of the pandemic.
Gucci-owner Kering gained 1.6%.
European earnings have come in largely positive, with analysts projecting a 24% drop in fourth-quarter profit for companies listed on the STOXX 600, slightly better than a 26% drop forecast a week ago, as per Refnitiv IBES data.
Danish medical device maker Ambu surged 14.3% after upbeat quarterly results, while German health technology company Siemens Healthineers gained 3% after it raised its 2021 outlook for sales and earnings.
Shares in French shopping mall operators Klepierre and Unibail surged 13.7% and 10.2%, respectively, after comments from a government minister eased concerns about a third national lockdown.
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