European stocks flat ahead of high-stake ECB meet

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European stocks flat ahead of high-stake ECB meet

On Wednesday, the 24th of July 2019, a majority of European bourses had been hovering near a two-week high reached yesterday (July 23rd), as a downslope slide of commodity stocks amid an uncertain trade outlook and ramped up geopolitical bubbles had offset gains of chip and auto stocks ahead of a long-anticipated ECB rate decision scheduled to be released on Thursday (July 25th), GMT 11.45.

Aside from that, ECB chief Mario Draghi’s speech on Frankfurt following ECB monetary decision due to be taken place on Thursday (July 25th), GMT 12.30, had kept large buyers at bay on Wednesday’s (July 24th) market.

Amid a relatively quiet trading session in most of the European stock exchanges, the regional Pan-European STOXX 600 winded down the day almost flatlined, up by 0.05 percent, while London’s FTSE 100 had witnessed an unprecedented dwindling with a jolt of 0.7 percent, as falling iron ore prices in China had weighed on the London bourse.

Meanwhile, Frankfurt’s trade-sensitive DAX rose following reveal of a resumption of Sino-US trade talk as early as by next Monday (July 29th), which had added a bullish wing to German chipmakers heavily exposed to Chinese exports including ASM International, Infineon Technologies alongside Siltronic, all of which had surged between 2.3 to 6.5 percent.

German carmaker Daimler AG soared 2.5 percent after the company had announced a cascade of measures aimed at cost cuts after reporting a quarterly loss earlier. Nonetheless, adding that the extent of ECB policy easing would likely to pivot European bourses this week and the next, a senior market analyst at Oanda in London, Craig Erlam said, “There is a feeling in this market that everything hangs on the central banks and they have to satisfy markets.

If you look at earnings, it’s not that we are looking for companies to excel. Small beats and misses won’t be latched onto as much as they would be, if everything wasn’t hanging on the central banks right now”.

Quoting statistics, on Wednesday’s (July 24th) market closure, London’s FTSE 100 shed 0.73 percent to 7,501.46 and French CAC 40 curbed 0.22 percent to 5,605.87, while Frankfurt’s trade-sensitive DAX added 0.26 percent to 12,522.89 and Italy’s FTSE MIB rounded off the day 0.57 percent higher at 22,080.32 on political relief.