European stocks couldn't maintain the early gains and closed weak on Wednesday. Investors remained cautious during the afternoon, eagerly waiting for important U.S. economic data that might offer a clearer picture regarding the future of interest rates.
The market showed an early surge in response to a series of robust earnings updates. The business sentiment in Germany also showed an improvement in April, according to survey data from the ifo Institute. Economists had predicted that Germany's business confidence index would increase modestly to 88.9 from March's initial estimate of 87.8. However, it surpassed expectations and reached 89.4 in April.
The most recent Industrial Trends Survey from the Confederation of British Industry showed that confidence among British manufacturers increased in April and their output expectations reached a six-month high. The business sentiment indicator increased to +9 percent in the April quarter, an improvement from -3 percent in January.
Predictions about a June interest rate cut by the European Central Bank by Joachim Nagel, president of Germany's Bundesbank, at the DZ Bank Capital Markets Conference 2024 implied that a series of rate cuts might not necessarily follow, which caused slight concern.
The pan-European Stoxx 600 ended down 0.43%. The U.K.'s FTSE 100, after reaching a new record high, closed down 0.06%. Germany's DAX and France's CAC 40 ended lower by 0.27% and 0.17% respectively. Switzerland's SMI dropped 0.86%.
Among other European markets, Belgium, Denmark, Finland, Poland, Portugal, Russia, Spain, and Sweden ended weak, while Iceland, Norway, and Turkiye saw gains. Austria, Greece, and Netherlands remained stable.
In the UK market, Anglo American Plc rose nearly 4.5%. Reckitt Benckiser's Q1 like-for-like net revenue growth of 1.5 percent boosted its gains to about 3%. Rio Tinto marked a 2.5% increase. Other gainers included BAE Systems, IHG, Glencore, Bunzl, and Mondi, which increased by 1 to 2%. Filtronic also leapt 47% after announcing a strategic partnership and commercial agreement with Space Exploration Technologies Corp.
In contrast, Croda International dropped 4.8%. Other losers included Ocado Group, Entain, Persimmon, and JD Sports Fashion, which lost 3 to 3.5%.
In the German market, Infineon saw more than 5% increase, while Siemens Healthineers, Rheinmetall, Brenntag, Beiersdorf, Continental, and Porsche posted moderate gains. Zalando, Deutsche Boerse, Fresenius Medical Care, Vonovia, Allianz, Deutsche Post, Bayer, Hannover Rueck, Volkswagen, Munich, Fresenius and Daimler Truck Holding lost 1.4 to 4%.
In the French market, STMicroElectronics gained about 5%. Renault marked a more than 2% increase. Schneider Electric, Dassault Systemes, Legrand, Arcelor Mittal, Thales, and Stellantis marked gains of 0.5 to 1.6%.
Eurofins Scientific dipped 7.7% while Kering fell nearly 7% on account of a profit warning and worries about decreasing demand for its Gucci brand. Orange, Air Liquide, Alstom, AXA, and Sanofi also closed notably lower.
ASM International, a Dutch water processing equipment supplier, soared by 11% as the company raised its Q2 revenue forecast after exceeding analyst estimates for revenue and earnings in the first quarter.
