Europe midday: Shares still lower ahead of Fed minutes
By Frank Prenesti
Date: Wednesday 25 May 2022
(Sharecast News) - European shares were still lower at the open on Wednesday as inflationary fears continued to weigh on sentiment and investors awaited the release of US Federal Reserve minutes.
The pan-European Stoxx 600 index was down 0.78% in early deals with regional bourses mixed. Germany's DAX bucked the trend after official data showed Europe's biggest economy recorded a 0.2% rise in first-quarter GDP, narrowly missing a recession.
Investors were also awaiting minutes of the US Federal Reserve's previous meeting for any signs of future interest rate moves.
"The feel good factor from earlier in the week has fizzed away but there is still some element of relief washing through the financial markets that the crutch of cheap money isn't going to be withdrawn quite so quickly," said Hargreaves Lansdown analyst Susannah Streeter.
"Jerome Powell, chair of the US Federal Reserve, soothed fears about ultra-aggressive monetary policy, indicating expectations of 0.75% rate hikes in the months to come were some way off the mark. That helped lift the Dow Jones at the end of the session and has steadied overall market sentiment."
"However, Powell's comments hinting that policymakers would be more measured is also an indication of concerns about weakness in the global economy. Transatlantic worries are still hovering about looming recessions hitting corporate and consumer spending.
In equity news, power company SSE gained after reporting a 23% surge in annual profit.
British radiation therapy equipment company Elekta jumped more than 6% in early trade after beating fourth-quarter profit estimates.
French catering company Sodexo fell after ruling out the opening up of its benefits business to an external investor.
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