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(Alliance News) - European equities closed lower on Monday during lacklustre trade as investors eagerly-await key US economic data later this week, which could frame Federal Reserve policy going forward.
The FTSE 100 in London ended down just 1.93 points at 7,912.20 on Monday. The mid-cap FTSE 250 lost 43.07 points, or 0.2% at 19,226.94. The AIM All-Share shed 1.45 points, 0.2%, at 828.85.
The Cboe UK 100 edged 0.1% to 791.74, the Cboe UK 250 rose 0.2% to 16,877.12, and the Cboe Small Companies surged 1.5% to 13,340.80.
"Monday's session seems to provide the template for most of the week – tentative gains that then slip away. With such an action-packed week investors are best described as 'skittish', fretting that data will prompt a reversal in markets but at the same time hoping for just enough good news to give stocks a reason to move out of their recent narrow range," IG analyst Chris Beauchamp commented.
The dollar was largely weaker. The pound was quoted at USD1.2457 at late Monday afternoon in London, higher compared to USD1.2410 at the local equities close on Friday. The euro stood at USD1.1026, up against USD1.0974. Against the yen, the dollar was trading at JPY134.38, higher compared to JPY134.28.
The dollar's outlook is somewhat tricky, if US data continues weakening. It may prompt the Federal Reserve to pivot from rate hikes.
"The US dollar could remain under pressure as traders increasingly view the possibility of a softer monetary policy in the near future as US data continues to show signs of weakness. The effects of the banking crisis could also push monetary policy in the same direction as credit conditions could continue to worsen. Such a trend could affect small and medium-sized businesses in the US and jobs as well as inflation eventually," CPT Markets analyst Denys Peleshok commented.
"The focus this week could remain on the US GDP figures that will be published toward the end of the week. Economic activity is expected to have slowed down significantly, which could further cement the current view for a softer monetary policy. The release of these figures could create strong volatility for the dollar."
In the final three months of 2022, US GDP expanded by 2.6% from the preceding quarter in the final three months of 2022. Markets are expecting GDP growth to slow to 2.0% in the first quarter of 2023, according to FXStreet.
The Fed meets next week Tuesday, with a decision and press conference with Chair Jerome Powell a day later. The central bank is expected to lift rates by 25 basis points.
In European equities on Monday, the CAC 40 in Paris ended down marginally, while the DAX 40 in Frankfurt lost 0.1%.
LVMH ended 0.1% higher. The company's market capitalisation topped USD500 billion on Monday, becoming the first European firm to reach that threshold.
"Recession forecasts might be all the rage, but for the luxury goods group LVMH it looks like the times couldn't be better having surged briefly to a USD500 billion valuation the firm seems to have the world at its feet. It might not escape unscathed if a recession does materialise, but as the 2020 and 2022 rebounds in its shares demonstrate, there is plenty of appetite for a stake in the ever-growing global luxury market," IG's Beauchamp commented.
In London, luxury goods peer Burberry up 1.3%, among the best FTSE 100 performers.
In Zurich, Credit Suisse shares rose 0.6%. It reported a swing to profit in its first quarter but a flight of deposits and assets under management, following the wipeout of its bondholders.
In its first-quarter results on Monday, Credit Suisse reported "significant withdrawals of cash deposits" and non-renewal of maturing time deposits during the period.
Customer deposits fell by CHF67 billion, or USD75 billion, in the first quarter of 2023. Credit Suisse also saw significant net asset outflows, especially towards the second half of March, with net asset outflows of CHF61.2 billion during the quarter.
Last month, a hasty government-brokered deal saw troubled Credit Suisse agree to merge with its alpine compatriot UBS.
UBS reports quarterly results on Tuesday. Among London-listed banks, Standard Chartered reports on Wednesday, Barclays on Thursday and NatWest on Friday.
The mining sector ended lower on Monday, putting some pressure on the FTSE 100.
CMC Markets analyst Michael Hewson commented: "Weak iron ore prices, which have slipped to their lowest levels this year, are acting as a dead weight on the likes of Glencore and Anglo-American."
Glencore lost 0.7%, while Anglo American fell 2.0%.
Elsewhere in London, Card Factory rose 10%. The greeting cards retailer expects revenue for the year ended January 31 of GBP463.4 million, with pretax profit of GBP52 million. Profit would be ahead of expectations, it said.
Card Factory delayed its annual results to May 3 as auditor KPMG needs more time. It had been due to report on Tuesday.
Medica Group surged 33%. It reached an agreement with private equity firm IK Investment Partners, on a takeover.
IK Investment will acquire the telemedicine services provider for 212 pence per share in cash. The deal values all of Medica at GBP269 million.
Stocks in New York were mixed at the time of the closing bell in Europe. The Dow Jones Industrial Average edged up 0.1%, the S&P 500 index was down 0.2%, and the Nasdaq Composite lost 0.7%.
Coca-Cola shares were 0.5% higher. The Atlanta, Georgia-based drinks maker reported net operating revenue of USD10.98 billion, up 4.7% from USD10.49 billion. The company's first quarter revenue beat Wall Street estimates of USD10.80 billion, according to data from Refinitiv.
Brent oil was quoted at USD82.10 a barrel late Monday in London, up from USD81.23 late Friday. Gold was quoted at USD1,982.78 an ounce, higher against USD1,977.53.
Tuesday's economic calendar has a US consumer confidence reading at 1500 BST.
The local corporate diary has interim results from Primark owner Associated British Foods, full-year numbers from Premier Inn owner Whitbread and a trading statement from builders' merchant Travis Perkins.
By Eric Cunha, Alliance News news editor
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