April 12 (Reuters) – European shares were subdued on Wednesday as investors remained cautious ahead of U.S. inflation data that is expected to provide more clues on Federal Reserve’s policy decision next month.
The pan-European STOXX 600 index (.STOXX) inched up 0.1%. Utilities (.SX6P) led the gains, rising 0.70%, while technology shares (.SX8P) slid 1.0%.
Miners (.SXPP) lost 0.4% after rallying in the previous session.
All eyes will be on U.S. inflation data, due at 1230 GMT (0830 ET), which is expected to show a moderation in consumer prices growth in March from a month ago in the world’s biggest economy but still remain elevated on a yearly basis.
“Markets are super-sensitive to any indication that the Fed will stay aggressive in its inflation-fighting stance,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
“The worry is that core inflation, which excludes volatile food and energy costs, may be proving harder to bring down more quickly, which could harden policymakers’ resolve”.
French central bank chief Francois Villeroy de Galhau on Tuesday said euro zone inflation is at risk of getting entrenched above 2% so the European Central Bank (ECB) will keep fighting excessive price growth, even as its policy response is shifting gears.
Commentary from ECB Vice President Luis de Guindos will be closely monitored later in the day.
Investors are still digesting the International Monetary Fund’s (IMF) warning that lurking financial system vulnerabilities could erupt into a new crisis and slam global growth this year.
The Fund’s World Economic Outlook forecast real GDP growth of 2.8% in 2023 and 3.0% in 2024 – one-tenth of a percentage point lower than what it predicted in January for each year. The global economy grew 3.4% in 2022.
Luxury group LVMH (LVMH.PA), Europe’s most valuable company, is due to report first-quarter sales after markets close, which will also be watched for indications on the strength of China’s recovery.
Shares of AB Volvo (VOLVb.ST) jumped 7.4% as the truck-maker reported record first-quarter profit on higher revenue and margins.
Shares of Deutsche Bank (DBKGn.DE) were up 0.7% as the bank is winding down its remaining software technology operations in Moscow to end two decades of reliance on Russian IT expertise, the Financial Times reported.
Zurich Insurance (ZURN.S) dropped 5.2%, after gaining in the last four sessions.
Reporting by Shubham Batra in Bengaluru; editing by Uttaresh Venkateshwaran and Sonia Cheema
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