Europe open: Shares up amid Q1 updates, but Nagel comments weigh

24th Apr 2024 08:47

(Sharecast News) - European shares edged higher at the open on Wednesday as the UK's FTSE 100 posted another intra-day record, but comments from a European Central Bank policy maker on rate cuts also tempered sentiment.

The pan-European Stoxx 600 index was up 0.08% at 508.22 in early deals. The FTSE 100 gained 0.36% to 8073, having hit 8083 in morning trade.

Joachim Nagel, president of Germany's Bundesbank, said that he would support a rate cut in June, if upcoming economic data increases the ECB's confidence that inflation would soon return back to the 2% target.

"However, such a step would not necessarily be followed by a series of rate cuts," he told a DZ Bank Capital Markets conference. "Given the current uncertainty, we cannot pre-commit to a particular rate path."

Nagel also expressed caution about the outlook for inflation, noting its persistence in the services sector, driven by "continued strong wage growth", and added that core inflation remained high.

"I am not fully convinced yet that inflation will actually return to target in a timely and sustained manner," he said.

In equity news, Kering shares slumped 9% as the luxury goods firm forecast a 40-45% plunge in first-half operating profit.

Elsewhere, computer chip supplier ASMI gained as it raised its second-quarter revenue forecast, citing stronger-than-expected Chinese demand and higher sales in advanced logic and memory.

Volvo Cars fell despite the Swedish automaker posting a rise in adjusted operating earnings, helped by lower material costs and higher volumes.

Allfunds also plunged 9% on reports the fund distribution company abandoned discussions over a potential sale.

Reporting by Frank Prenesti for Sharecast.com