Tuesday saw a closing of higher European stocks, with investors examining regional economic data, earnings news, and assessing the monetary policy decisions made by the Reserve Bank of Australia and the Bank of Japan. All this was done in anticipation of the Federal Reserve's policy announcement. Many predict the Fed will keep interest rates as they are. Changes in the central bank's statement and economic projections could influence future rate outlooks.
Recent inflation rates, higher than expected, have brought down the optimism regarding the Fed’s first rate cut potentially happening in June. The Bank of England and the Swiss National Bank are also set to announce their interest rate decisions this week. Boosting sentiment a bit were the expectations of a rate cut by the European Central Bank in June.
The collective European Stoxx 600 saw a gain of 0.26%, with the UK's FTSE 100 advancing by 0.2%, Germany's DAX by 0.31%, and France's CAC 40 by 0.65%. On the other hand, Switzerland's SMI saw a decrease of 0.39%. Other European markets, including Austria, Belgium, Finland, the Netherlands, Norway, Spain, Sweden and Turkey, closed higher. Whereas, Denmark, Greece, Iceland, Poland, Portugal and Russia ended on a weaker note.
In the UK, Unilever's stock rose by more than 3% after it announced plans to separate its Ice Cream division, and to launch a major productivity program aimed at driving faster growth and extending margin. Rolls-Royce Holdings saw a gain of around 2.3%, along with other several companies experiencing a rise of 1 to 2%. However, stocks of several other companies such as Fresnillo, Reckitt Benckiser and Airtel Africa saw a loss of 3 to 4.5%.
In Germany, Hannover Rueck’s stocks saw a notable rise of more than 4%. However, Siemens experienced a steep tumble, falling nearly by 6%. Paris-based TotalEnergies saw a gain of about 2.7%, whereas STMicroElectronics, Dassault Systemes and WorldLine experienced losses ranging from 2 to 3%.
German economic sentiment has reportedly strengthened more than anticipated, reaching a good two-year high in March due to investor expectations for an interest rate cut by the European Central Bank in the coming months. The ZEW indicator of economic sentiment rose to 31.7 in March from 19.9 in February.
Switzerland's international trade surplus decreased in February from previous month as the imports rose at a faster pace than exports. The trade surplus dropped to 2.2 billion CHF in February from 2.7 billion CHF in January. In relation to this, watch exports decreased by 3.8% year-on-year in February, as per the Federation of the Swiss Watch Industry.
