Europe: Shares end flat as Fed fears, virus concerns weigh

[BENGALURU] European stocks ended flat on Tuesday as investors held back from making big bets ahead of an update on US monetary policy, even as data outlined a stronger-than-expected economic recovery in Germany.

The pan-European Stoxx 600 index closed largely unchanged at 471.79 points, following a selloff last week that knocked it off record levels.

Commodity-linked sectors continued to outpace the general market, as oil and metal prices rose on expectations of a recovery in major importer China.

Basic resources stocks were the best performers for the day, rising 2 per cent.

Travel stocks also surged nearly 2 per cent after US health regulators granted full approval to the Covid-19 vaccine developed by Pfizer and BioNTech in a move that could accelerate US inoculations.

Global stocks wobbled last week after data from US and Asian economies signalled a slowing global economic recovery, as a spike in the Delta variant of the coronavirus prompted fresh restrictions in several parts of the world.

Investors are awaiting US Federal Reserve chief Jerome Powell's speech at the annual Jackson Hole symposium on Friday for hints on the central bank's asset purchases tapering plans.

"Since the release of the Fed minutes last week, the consensus for the start of tapering has moved slightly forward, from the beginning of 2022 to December 2021," Unicredit analysts said.

"A hawkish surprise from Jackson Hole appears less likely and the next topic of major relevance is probably the US labour market report on Sept 3."

Meanwhile, German stocks rose 0.3 per cent as data showed Germany's gross domestic product grew by 1.6 per cent on the quarter from April to June, slightly up from its previous estimate of 1.5 per cent, helped by private consumption and state spending.

Marks and Spencer Group (M&S) rose 4.1 per cent after Berenberg and Credit Suisse raised their price targets on the UK retailer's stock.

"Despite it being a moderate environment for UK consumption..., M&S is enjoying favourable positioning, market share gains from peers disappearing," Credit Suisse analysts said in a note.

Norwegian salmon farmer Bakkafrost gained 1.9 per cent following its second-quarter results.

Novartis slipped 1.7 per cent after the Swiss drugmaker said its Kymriah CAR-T therapy did not meet the primary endpoint in a late-stage study.

REUTERS