European Shares Remain Flat as Investors Await Key Economic Data

European shares showed muted movement on Tuesday as investors held back, awaiting the outcome of the Federal Reserve’s monetary policy meeting and upcoming Eurozone inflation data. Despite the overall cautious sentiment, technology and oil stocks provided some support to the market.

STOXX 600 Index
The pan-European STOXX 600 index inched up by 0.1%, reaching 512.44 points by 0830 GMT.

Technology Sector
Technology stocks gained 0.1%, driven by anticipation of earnings reports from major tech players such as Microsoft and AMD, scheduled for later in the day. However, the tech sector remains under pressure globally following disappointing results from Tesla and Alphabet last week.

Upcoming Economic Data
Investors are closely watching the Federal Reserve’s two-day policy meeting, which starts later today. Market expectations are leaning towards a possible rate cut as early as September. Additionally, Eurozone preliminary GDP and consumer confidence data are set for release, alongside several inflation readings. Notably, German economic data revealed an unexpected contraction of 0.1% in GDP for the second quarter, contrary to forecasts of a 0.1% growth, leading to a 0.2% dip in the German benchmark DAX.

Individual Stock Movements

• Diageo: The spirits maker saw its stock drop by 10% after reporting a 4.8% decline in annual profit, missing analyst expectations. This decline impacted the food and beverages sector, which fell by 1.2%.
• Basic Resources: The sector fell by 1.4% as base metal prices, including aluminium and zinc, hit three-month lows amid slowing global growth and risk-off sentiment.
• BP: The oil giant’s shares rose by 2.1% after exceeding market expectations with its earnings report. BP also increased its dividend and extended its share repurchase program, which boosted the oil sector by 0.7%.
• Standard Chartered: The bank’s stock surged by 5.7% following the announcement of a $1.5 billion share buyback and a raised annual earnings forecast.
• St James’s Place: Shares soared by 20.6% after the British wealth manager revealed plans to cut costs by tens of millions of pounds.

As traders and investors brace for key economic reports and central bank meetings, market movements are likely to be influenced by the outcomes of these significant events.