European stocks slipped into negative territory Wednesday morning, as market participants digested a fresh round of corporate earnings while bracing for a dovish outcome from the European Central Bank's (ECB) upcoming monetary policy meeting.
The pan-European Stoxx 600 fell 0.2% by mid-morning, autos performing well with a 0.8% while basic resources stocks tumbled 2%.
European Markets: FTSE, GDAXI, FCHI, IBEX
Market focus is largely attuned to global central banks, amid expectations that the ECB and the Federal Reserve could soon cut interest rates.
The ECB is seen cutting rates by 10 basis points on Thursday, with the U.S. central bank expected to lower rates by 25 basis points at the end of the month.
The prospect of a wave of policy stimulus appeared to soften the impact from the International Monetary Fund's (IMF) latest downgrade to its global growth forecasts.
The global economy is expected to expand by 3.2% in 2019, the fund said Tuesday. That's 0.1% lower than its previous forecast, as the Washington-based institute cited ongoing concerns about the U.S.-China trade war, Brexit and muted inflation rates.
In the U.K., Boris Johnson will begin the process of forming his government later in the session, as he enters Downing Street to officially succeed Theresa May as prime minister.
The new Conservative Party leader has insisted the U.K. must leave the EU by the October 31 deadline "come what may. "
On the data front, PMI (Purchasing Managers' Index) data showed that a recession in Germany's manufacturing sector worsened in July with goods producer performance falling to its lowest level in seven year. French business growth also slowed unexpectedly. The euro slumped to two-month lows to $1.1127 following the PMI figures, but recovered slightly to trade around the $1.1140 mark.
The U.K.'s Confederation of British Industry (CBI) is also expected to report its business optimism index for the third quarter at around 11:00 a.m. London time.
Earnings in focus
Deutsche Bank reported a weaker-than-expected net loss of 3.15 billion euros ($3.51 billion) for the second quarter of 2019 due to substantial strategic transformation charges of 3.4 billion euros. Deutsche Bank shares fell 3.7% by mid-morning trade.
French carmaker Peugeot delivered a sharp increase in first-half profit, as new models and the integration of Opel-Vauxhall more than made up for weaker emerging-market sales. The group's share price rose by 1.9%.
Daimler said it would intensify cost cuts after legal risks for diesel-related issues and the cost of replacing Takata airbags triggered a 1.56 billion euros ($1.74 billion) loss before interest and taxes in the second quarter. Daimler shares recovered from early losses to trade 1.7% higher.
ITV shares surged 7.2% to the top of the Stoxx 600 after Britain's biggest free-to-air commercial broadcaster said a strong contribution to online revenue from reality show "Love Island" helped limit a fall in ad revenue to 5% for the first half of the year.
Shares of Finnish pulp and paper technology company Valmet tumbled 7.1% after both Inderes and Morgan Stanley cut its price target.
Outside the main European blue chip index, Aston Martin shares plunged 23% after the British luxury carmaker issued a profit warning amid weakness in the U.K. and mainland Europe.
https://www.cnbc.com/2019/07/24/europe-stock-markets-earnings-and-ecb-policy-meeting-in-focus.html
2019-07-24 05:42:01Z
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