Forexpros – European stocks closed mixed Wednesday, as investors remained cautious ahead of the minutes of the Federal Reserve’s latest policy meeting to be released later in the session and amid sustained euro zone debt concerns.
At the close of European trade, the EURO STOXX 50 rose 0.20%, France’s CAC 40 declined 0.57%, while Germany’s DAX 30 advanced 0.24%.
Equity sentiment remained under pressure after Germany’s Constitutional Court delayed on Tuesday its decision on whether the euro zone’s bailout fund, the European Stability Mechanism, is compatible with German law.
Without German backing, the ESM, which was originally meant to start on July 1, then delayed to July 9, cannot come into effect.
Meanwhile, Spanish Prime Minister Mariano Rajoy announced EUR65 billion of new austerity measures, in an effort to meet new budget-deficit targets agreed with euro zone partners.
Market analysts warned that the fresh austerity measures were likely to drag Spain’s economy deeper in to a recession.
Auto stocks remained broadly lower, as shares in BMW dropped 0.79% and Daimler fell 0.25%, while Peugeot and Renault tumbled 1.12% and 1.21% respectively.
Italy’s Mediaset plunged 3.48% as the broadcaster controlled by former Prime Minister Silvio Berlusconi was cut to sell from hold at Societe Generale.
Meanwhile, retailer Carrefour surged 1.48%, erasing earlier losses, although the company’s first-half sales in France fell 6.3%.
Financial stocks extended gains, led by Italian lender Unicredit, up 2.71%, and Holland’s ING group, whose shares rallied 2.24%.
France’s BNP Paribas and Societe Generale also gained 2.13% and 2.11%, while Germany’s two biggest lenders, Deutsche Bank and Commerzbank, advanced 0.93% and 0.72% respectively.
In London, FTSE 100 eased higher 0.01%, although weighed by Burberry’s sharp losses.
The U.K.’s largest luxury-goods maker saw shares sink 6.66% after the company posted fiscal first-quarter sales that trailed analysts’ estimates as revenue from its licensing business fell in a “challenging” period.
Elsewhere, mining giants were mixed as shares in Rio Tinto and BHP Billiton dropped 0.88% and 1.05%, while copper producer Xstrata jumped 1.39%.
Financials stocks were also mixed. Shares in the Royal Bank of Scotland climbed 0.91% and HSBC Holdings rose 0.36%, while Lloyds Banking and Barclays declined 0.21% and 0.70% respectively.
Bloomberg reported earlier that HSBC Holdings was to apologize at a July 17 U.S. Senate hearing for anti-money laundering controls that weren’t effective enough.
Europe’s largest bank was to be questioned about two weeks after a record fine was levied against Barclays for rigging interest rates and its ex-CEO Robert Diamond testified in the U.K.
In the U.S., equity markets followed mixed with the Dow off 0.22%, the S&P 500 higher by 0.13%, while the Nasdaq dropped 0.47%.
Also Wednesday, Germany saw borrowing costs fall to a record low at an auction of 10-year government bonds, as sustained concerns over the region’s debt crisis continued to boost demand for safe haven bunds.
Investors are anticipating the FOMC minutes later in the session as well as the Chinese GDP, U.S. initial jobless claims and Federal Budget numbers along with a chat by ECB President Mario Draghi on Thursday.
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