Europe close: Stocks end on mix note as traders play it safe ahead of Fed
By Alexander Bueso
Date: Wednesday 21 Mar 2018
(ShareCast News) - Stocks on the Continent ended the session on a mixed note ahead of the US central bank's policy decision, with some traders rather wary of the possibility of further declines in shares given the recent volatility in global capital markets.
Significantly, Bloomberg reported that the chances of a deal between Italy's two main populist parties, the Five Star and the League, on forming a government were rising.
Until recently, the possibilities of such a scenario had been dismissed by analysts, who generally appeared to consider it a risk factor.
Against that backdrop, by the close of trading the benchmark Stoxx 600 index was dipping 0.16% or 0.61 points to 374.96, while the German Dax was up by 0.01% to 12,309.15, while the Cac-40 was off by 0.24% or 12.69 points to 5,239.74.
In parallel, the yield on the benchmark 10-year Italian Treasury note was higher by four basis points at 1.93%.
Separately, Italian daily La Repubblica reported that Silvio Berlusconi might be open to reaching an agreement, in conjunction with his coalition partners from the League, with Five Star.
Commenting on the situation in markets, earlier in the day Michael Hewson at CMC Markets UK told clients: "After a disappointing start to the week European markets rebounded modestly yesterday, however with all the talk of trade wars and plateauing economic data it is becoming apparent that the momentum seen in January has well and truly dissipated.
"Momentum indicators are starting to flash warning signs of further declines, while we saw German investor sentiment in March slip back to an eighteen month low."
Nonetheless, the geopolitical headlines on Wednesday morning appeared to be coming in on the positive side of things, with reports surfacing regarding a possible three-way summit between the US, South Korea and North Korea.
Meanwhile, on Tuesday evening the US president tabled the possibility of a meeting with Russian leader Vladimir Putin in the not too distant future.
Back in the corporate patch, Deutsche Bank's planned flotation of its asset management unit had been oversubscribed by two-and-a-half times, Reuters reported citing a person familiar with the matter.
Another German heayweight, Bayer, also made the headlines after clinching the EU's approval for its $62.5bn takeover of US rival Monsanto.
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