Europe open: Stocks dip ahead of ECB
By Alexander Bueso
Date: Thursday 04 Jun 2020
(Sharecast News) - Stocks were trading a tad lower as investors paused for breath and ahead of Thursday's monetary policy announcement from the European Central Bank.
Early losses on Thursday followed three consecutive sessions of sharp gains across the Continent that had seen shares rise to roughly three-month highs.
Commenting on the expected ECB decision, Chris Beauchamp at IG said: "The flow of liquidity over the past few months has been prompt and overwhelming, helping economies to weather the most perilous time in years, and for the time being it shows no sign of letting up.
"The actual market impact today of a fresh boost may be limited, given how widely-expected the move is, but it signals the continued willingness of central banks to act, and investors should be reassured by this."
The ECB was expected to ramp-up its so-called PEPP asset purchase programme by €500bn and some economists saw scope for further easing.
Against that backdrop, the German Dax was retreating 0.76% to 12,392.15, alongside a 0.66% drop for the French Cac-40 to 4,989.68, while the FTSE Mibtel was off by 1.14% at 19,417,40.
Also on the stimulus front, lawmakers from Germany's ruling coalition surprised markets with a €130bn stimulus package, centred around temporary reductions in VAT, investment in 5G data networks and railways, and a doubling of incentives for electric cars.
Previously, reports had indicated that Berlin might approve between €50-100bn in new stimulus spending.
Elsewhere on the economic front, euro area retail sales plummeted at a 11.7% month-on-month clip in April (consensus: -15%).
And in Greece, Elstat reported a 1.6% quarter-on-quarter contraction in first quarter gross domestic product, as capital investment shrank by an outsized 8.4% and with net imports acting as a further drag.
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