European shares subdued on Fed rate-hike bets

EUROPEAN shares were subdued at the open on Thursday (Jun 18), as investors bet the Federal Reserve’s next move would be a rate hike following hawkish projections from policymakers, although easing oil prices helped temper inflation concerns.

The pan-European Stoxx 600 index edged 0.15 per cent lower to 638.35 points by 0812 GMT.

The Fed held rates steady on Wednesday, but persistent inflation concerns led nine policymakers to project one rate hike this year.

Traders see a 49.5 per cent chance of a September increase and expect rates to remain unchanged thereafter through year-end, per CME Group’s FedWatch tool.

Oil prices extended losses on Thursday, with Brent Crude trading near US$77 a barrel, after the US and Iran signed an interim agreement to end the war, reopen the Strait of Hormuz and waive US sanctions on Teheran’s oil.

Energy price-sensitive airlines Lufthansa and Air France rose 0.9 per cent and 2.7 per cent, respectively.

Tech stocks gained 0.6 per cent, with chipmakers Infineon and Aixtron gaining more than 4 per cent tracking a rally in Asian stocks.

Generali rose 2.6 per cent after a report that UniCredit is seeking to double its stake in the lender through Delfin, the Del Vecchio family holding company. UniCredit shares were up 0.3 per cent.

UK’s biggest food retailer, Tesco, slipped 3.3 per cent after reporting a slowdown in first-quarter sales growth on impact from the Middle East conflict.

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