June 21, 2024

European stocks edge higher; investors await ECB meeting By Investing.com

© Reuters

Investing.com – European stock markets edged higher Tuesday, continuing the recent tech-inspired rally as investors awaited the European Central Bank’s policy decision later this week.

At 03:05 ET (08:05 GMT), the in Germany traded 0.3% higher, the in France traded up 0.3% and the in the U.K. rose 0.4%.

ECB policy meeting looms large

European equities have started the new week on a positive note, helped by a strong lead from the U.S. tech sector, which drove the to a record high on Friday, the first in two years.

However, gains are limited Tuesday as investors await Thursday’s monetary policy decision by the for clues surrounding the timing of interest rate cuts from the central bank.

ECB President said last week that price growth in the eurozone is on track to cool to the bank’s 2% target, but also suggested that it was too early to declare victory over inflation.

Traders have priced in a cut of about 100 basis points in interest rates this year, with a 96% chance of the first cut coming in June.

BOJ keeps rates at historic lows

The kept short-term interest rates at a historical low of -0.1% earlier Tuesday, and left its yield curve control policies unchanged, as widely expected.

The central bank also slightly lowered its inflation outlook for fiscal 2024, suggesting the policymakers will have more time to keep monetary policies in ultra-easy mode.

Ericsson posts drop in quarterly profit

In the corporate sector, Ericsson (BS:) stock fell 2.2% after the telecom equipment supplier reported a fall in fourth quarter operating profit but beat expectations as it increased its margin in a market where demand for 5G gear is growing slowly. 

Swatch Group (SIX:) stock gained 0.3% after the world’s biggest watchmaker reported a 5.2% increase in annual sales, adding it saw “excellent growth prospects” for 2024.

Sanofi (NASDAQ:) stock fell 0.5% after the French healthcare company agreed to buy the drug development project INBRX-101 from its parent company Inhibrx for around $2.2 billion.

Crude gains on fresh strikes on Houthi sites 

Oil prices edged higher Tuesday after U.S. and British forces carried out a fresh round of strikes on Houthi sites in Yemen, aimed at degrading the missile and surveillance capabilities used by the Iran-aligned group against Red Sea shipping.

The Houthis, who control the most populous parts of Yemen, have disrupted global shipping through the Red Sea, raising concerns that crude supply to the important Asian market will be impacted.

The group has said their attacks are in solidarity with Palestinians as Israel strikes Gaza.

By 03:05 ET, the futures traded 0.2% higher at $74.94 a barrel, while the contract climbed 0.2% to $80.22 a barrel. 

The latest reading of U.S. crude inventories, from the industry body , is due later in the session, and is forecast to fall by about 3 million barrels in the week to Jan. 19.

Additionally, rose 0.5% to $2,031.85/oz, while traded 0.2% higher at 1.0906.


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