European equities remained static in subdued trading on Wednesday, with losses in the substantial healthcare and technology sectors offsetting gains in mining and travel stocks. British equities underperformed after inflation data was released.
The pan-European STOXX 600 index was unchanged at 514.67 points as of 0831 GMT. The healthcare sector was one of the largest detractors, falling 0.3%, while the technology sector declined by 0.4%.
The UK’s FTSE 100 index dropped 0.2% following reports that British inflation hit its 2% target in May for the first time in almost three years. However, persistent underlying price pressures suggest the Bank of England may delay interest rate cuts.
“Service sector inflation remains elevated, leading to a slower decline in core CPI compared to the headline inflation rate. We might even see inflation increase later in the year, indicating a complex path forward,” said Shaun Port, managing director for savings at Chase UK.
Attention is now turning to upcoming interest rate decisions from the central banks of England, Norway, and Switzerland.
European stocks experienced significant losses last week after French President Emmanuel Macron announced snap elections in the wake of his centrist party’s defeat in the European Parliament elections.
Recent polls show Marine Le Pen’s far-right National Rally party leading the first round of the parliamentary election.
“Le Pen understands the need to gain the confidence of bond and hopefully stock markets… she aims to reduce fiscal strain and present a more business-friendly stance,” commented Janet Mui, head of market analysis at RBC Brewin Dolphin.
Supporting the broader market, the travel and leisure sector rose by 0.7%, led by a 2.7% increase in Accor shares after Barclays upgraded the hotel group’s rating to “overweight.”
The basic resources sector grew by 0.8%, mirroring a recovery in metal prices, while the oil and gas sector advanced by 0.3%.
In other stock movements, SMA Solar Technology AG plummeted by 30.5% after the German solar equipment supplier reduced its profit forecast due to political uncertainties.
Spectris, a British scientific instruments manufacturer, saw its shares fall by 9% after predicting its annual adjusted operating profit would be at or slightly below market expectations.
Umicore’s shares surged by 4.2% following an upgrade by J.P.Morgan from “underweight” to “overweight.”
Trading volumes are expected to be lower without U.S. market participants, as American markets were closed for a public holiday.