Stocks in Europe end the week without significant change following announcements by major central banks
The U.S. Federal Reserve made a 25 basis point cut in interest rates, as anticipated, yet the Fed's policy outlook remained less dovish than expected, signalling a measured pace of future cuts.
Elsewhere, the pan-European STOXX 600 closed 0.04% lower at 554.81 points, marking a slight dip. The media index dropped 2.4% to an over two-week low, with WPP, an advertising group, closing at its lowest since March 2009.
However, not all sectors experienced a downturn. The European banks index led gains for the day, up 1.26%. The tech story remains significant for the global rally, with European technology stocks becoming the week's top-performing sector, boasting a gain of 4.9%. A $5 billion deal between Intel and Nvidia boosted regional semiconductor stocks.
In the auto industry, Aumovio, an auto parts and components supplier, gained 1.2%, while tyre maker Continental jumped 29.3% a day after spinning off Aumovio.
The energy sector followed the trend of falling oil prices, with energy stocks down 0.8%. Meanwhile, defense stocks rose 0.8%, hovering near record highs.
Looking at individual countries, Italy is likely to receive a ratings boost from Fitch, reflecting political stability and improving public finances. Norway's central bank lowered rates by 25 bps this week. Germany approved the nation's first annual budget since loosening fiscal rules.
In the world of finance, Hedge fund Man Group jumped 5.3% after UBS upgraded the stock to "Buy" from "Neutral". Kiran Ganesh, multi-asset strategist at UBS Global Wealth Management, believes investors are betting on tech investments to be productive.
The Bank of England left borrowing rates unchanged this week, maintaining the status quo.
Lastly, European logistics companies Maersk and Hapag-Lloyd dropped 5.9% and 4.8%, respectively, due to a sharp drop in container freight indices and concerns about softening U.S. port volumes.
Franziska Palmas, senior Europe economist at Capital Economics, suggests it may take time for spending to ramp up after the budgets for 2025 and 2026 have been passed. The global markets continue to show a mixed bag of results, with various sectors experiencing different trends and developments.
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