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European shares tread water as investors assess Fed rate path

Published 26/03/2024, 07:43 pm
© Reuters. The German share price index DAX graph is pictured at the stock exchange following the IPO of perfume retailer Douglas in Frankfurt, Germany, March 21, 2024. REUTERS/Staff/File Photo
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By Shristi Achar A

(Reuters) -European shares were little changed on Tuesday, with losses in miners offset by gains in travel and leisure stocks, while investors gauged mixed messages from U.S. Federal Reserve policymakers that clouded the outlook for monetary policy easing.

The pan-European STOXX 600 held firm at 509.65, as of 0940 GMT.

The benchmark index was on course to end a second straight quarter with gains in the holiday-shortened week, up 6.4% so far, underscored by major central banks, including the Fed and the Bank of England, signalling rate cuts this year.

Comments from Fed officials left doubts hanging over the timing of rate cuts. Fed Governor Lisa Cook urged caution and Atlanta Fed President Raphael Bostic reiterated Friday remarks trimming his expectations to one cut.

"They've (Fed) always stressed their data dependence arguments and so if you saw consistently higher-than-expected inflation prints in the coming months, you could see market participants begin to revisit those assumptions," said Richard Flax, chief investment officer at Moneyfarm.

Markets now await the personal consumption expenditure data - the Fed's preferred inflation measure - due on Friday, for further cues on its interest rate path.

Miners led sectoral declines with a 0.6% fall, tracking weaker copper prices. [MET/L]

Losses in miners were offset by a 0.8% advance in travel and leisure stocks, with Flutter rising 1.8% as the online betting firm said it expects to increase its core profit by around 30% this year.

A 0.7% gain in euro zone banks also limited declines.

Meanwhile, a survey showed German consumer sentiment is expected to stay on its path of slow recovery in April as fewer households felt the need to save even as uncertainty about Germany's economic development looms.

The German DAX 40 index edged up 0.2%.

Among other movers, shares of Atos fell 6.5% after the French IT consulting firm said it was aiming to restructure its heavy pile of debt by July following a record annual loss.

Ocado (LON:OCDO) added 2.7% after the British online supermarket's joint venture Ocado Retail kept its guidance for the year as it reported a 10.6% increase in first-quarter revenue reflecting growth in customer numbers.

© Reuters. The German share price index DAX graph is pictured at the stock exchange following the IPO of perfume retailer Douglas in Frankfurt, Germany, March 21, 2024. REUTERS/Staff/File Photo

ASOS (LON:ASOS) jumped 9.7% after the British online fashion retailer said its cash flow in the first half of the year improved due to better profitability and clearance of aged stock.

European markets will be closed on Friday and Monday for Easter holidays.

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