June 17 (Reuters) – European shares were muted at the open on Wednesday as investors awaited details of the U.S.-Iran peace agreement and the Federal Reserve’s outlook on monetary policy, while auto stocks fell after carmaker BMW cut its annual forecast.
The pan-European STOXX 600 index edged 0.05% higher to 636.29 points by 0710 GMT.
Auto stocks led sectoral losses, declining 2.3%, with BMW dropping 7.3% after the premium carmaker lowered its annual profit outlook due to weakness in the Chinese market and impact of the Iran war.
Separately, a survey showed that German automotive suppliers expecting business conditions to worsen over the next year now outnumber the industry’s optimists, as domestic hiring sinks to a new low and investment in the sector moves overseas.
Global investors are on edge ahead of the signing of a peace deal between the U.S. and Iran on Friday after the countries signed a preliminary agreement to end the conflict.
The sharp drop in oil prices since then has lifted global sentiment, with the benchmark STOXX 600 trading near an all-time high. Barclays was the latest brokerage to announce that it has closed its underweight position on European stocks.
The focus later in the day will be on the Fed’s monetary policy decision, with the spotlight on new Chair Kevin Warsh’s commentary on the interest rate outlook.
Among individual stocks, Leonardo rose 1.7% after the Italian government gave its conditional approval to the joint venture between the state-controlled defence group and Turkey’s Baykar.
(Reporting by Utkarsh Hathi and Johann M Cherian in Bengaluru; Editing by Sonia Cheema)
Comments