By Johann M Cherian and Ozan Ergenay
(Reuters) – European shares see-sawed in a tight range on Wednesday as investors stayed on the sidelines ahead of a crucial inflation report that could sway expectations on the timing of the European Central Bank’s first rate cut.
The continent-wide STOXX 600 was down 0.1% by 0829 GMT. Rate-sensitive real estate stocks lost 0.9%, while banks gained 0.6%.
Following a cooler-than-expected inflation report on Tuesday from Germany, the region’s largest economy, all eyes will be on the Eurozone inflation March report, due at 0900 GMT.
Excluding volatile components, consumer prices are expected to rise 3% in March, slightly easing from a 3.1% jump in the previous month.
“There’s likely to be some nervousness in Europe on the back of (the data) that could influence the path for monetary policy from the ECB,” said Daniela Hathorn, senior market analyst at Capital.com.
“Markets now expect the ECB to be the first out of the Fed and Bank of England to cut interest rates because inflation has come down significantly and growth isn’t showing signs of concern.”
Earlier in the day, Austrian policymaker Robert Holzmann said the ECB could start cutting interest rates in June as inflation may fall quicker than expected.
Hopes of interest rates being reduced through the year and optimism around artificial intelligence have buoyed investor sentiment over the past two quarters, with the benchmark index hovering near record highs.
On the day, the technology sector inched up 0.2% in choppy trading. A powerful earthquake in Taiwan raised concerns about possible disruptions to the vital chip-making industry, which had spearheaded much of the global rally in the previous quarter.
Among individual stocks, solar panel maker Meyer Burger said it had successfully completed a capital increase through a rights issue, bringing in gross proceeds of 206.75 million Swiss francs ($227.7 million). The stock, however, fell 28.5%.
Swiss Re dropped 1.6% to the bottom of Switzerland’s benchmark index after the reinsurance firm said it would appoint its corporate solutions boss Andreas Berger as its group chief executive from July, replacing long-serving CEO Christian Mumenthaler.
FinecoBank gained 5.4% after brokerage J.P.Morgan upgraded the Italian bank to “overweight” from “neutral”, while Infineon rose 2% after Morgan Stanley upped the German chipmaker to “overweight” from “equal-weight”.
Later in the day, investors will also parse remarks from U.S. Federal Reserve Chair Jerome Powell for clues on when the central bank will deliver its first rate cut.
(Reporting by Johann M Cherian and Ozan Ergenay; Editing by Eileen Soreng and Sonia Cheema)
