By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — European stock markets moved lower on Wednesday, as investors remained in wait-and-see mode ahead of central-bank events in the U.S. and Europe, with miners and banks adding the most pressure.
The Stoxx Europe 600 index XX:SXXP -0.02% gave up 0.3% to 266.42.
U.S. stock futures pointed to a lower open on Wall Street.
Bouygues SA FR:EN -7.90% posted one of the biggest drops in the pan-European index, off 8.2%, as the construction-to-telecom firm said it expects full-year profit for its mobile unit to come in lower than earlier forecast. See: Bouygues sees mobile phone profit falling further
Elsewhere, market spectators were waiting for U.S. Federal Reserve Chairman Ben Bernanke to talk at a conference in Jackson Hole, Wyo., where any hints of further easing action to boost the economy will be scrutinized. The European Central Bank’s interest-rate decision next week was also a focus for investors.
“ECB president [Mario] Draghi’s announcement yesterday that he and other ECB board members will not be present at the Jackson Hole conference later this week has increased expectations that the ECB will announce a more comprehensive strategy for its bond purchases in connection with next week’s ECB meeting,” analyst at Danske Bank said in a note.
An interest-rate cut is also likely to be on the table and analysts at Morgan Stanley forecast that the governing council will cut the refi rate by 25 basis points to 0.5%.
“But in addition to this, we still think that the ECB has multiple levers it could pull to combat the sovereign-debt crisis. In our view, the most powerful policy combination would be to use the [European Financial Stability Facility] for primary market support (especially partial risk protection) and complement it with ECB support in the secondary market,” they said in a note.
Portugal’s debt situation was also in the spotlight, after the Portuguese daily Economico reported that the country may get a break on its 2012 deficit target from the troika of the European Union, European Central Bank and International Monetary Fund. See: Portugal may get leeway on 2012 budget: report
The PSI 20 index PT:PSI20 -0.07% edged 0.1% lower to 4,973.97.
Movers
Risk sensitive sectors, such as banks and resource firms, were among the biggest decliners in Europe.
Spain’s Banco Santander SA ES:SAN -1.33% SAN -1.14% fell 1.2% and added pressure on the IBEX 35 index XX:IBEX -0.23% . The index lost 0.4% to 7,306.30.
In the U.K., miners dragged the benchmark index lower, as metals prices dropped. Rio Tinto PLC UK:RIO -2.66% RIO -1.93% lost 1.9% and BHP Billiton PLC UK:BLT -0.78% BHP -0.40% fell 1%.
The FTSE 100 index UK:UKX -0.32% slid 0.4% to 5,750.72, further weighed by HSBC Holdings PLC UK:HSBA -0.72% HBC -0.39% HK:5 -0.29% , off 0.9%, and Barclays PLC UK:BARC -1.03% BCS -0.34% , down 1.4%.
Among German stocks, Deutsche Lufthansa AG DE:LHA -1.63% dropped 2% amid failed negotiations between the airline and German labor union UFO, representing the cabin crew, which could lead to strikes. UFO, however, said there won’t be a strike Wednesday. See: German union: No Lufthansa cabin-crew strike.
The DAX 30 index DX:DAX +0.05% was off 0.5% at 6,964.81.
Bucking the negative trend in Europe, utility firm Fortum Oyj FI:FUM1V +1.35% rose 1.6%, as J.P. Morgan Cazenove lifted the Finnish firm to neutral from underweight.
Sara Sjolin is a MarketWatch reporter, based in London.
