FX.co ★ European Stocks Close Broadly Lower Ahead Of ECB, SNB Policy Announcements

European equities closed broadly lower on Wednesday as investors monitored political developments within the region and sought new market catalysts.

The risk premium on French bonds remained steady, despite ongoing concerns about the country's debt trajectory and fiscal outlook.

Jordan Bardella, leader of the National Rally, stated he would not assume the role of prime minister unless his party achieved a decisive win in France's snap election. Polls suggest Marine Le Pen's party is poised to become the largest group in the National Assembly, though projections indicate it may fall short of an outright majority.

Both the Bank of England and the Swiss National Bank are set to deliver their monetary policy updates on Thursday.

With the U.S. market closed in observance of the Juneteenth holiday, trading volumes were lighter in European markets.

The pan-European Stoxx 600 index declined by 0.17%. Germany's DAX and France's CAC 40 dropped 0.35% and 0.77%, respectively. Conversely, the U.K.'s FTSE 100 rose by 0.17%, and Switzerland's SMI edged up by 0.11%.

Elsewhere in Europe, markets in Austria, Denmark, Greece, Poland, and Turkey closed higher.

However, markets in Finland, the Netherlands, Portugal, and Sweden ended weaker, while Belgium, Iceland, Norway, and Spain were flat.

In the UK market, Smurfit Kappa Group surged nearly 5%, while Beazley, Hargreaves Lansdown, JD Sports Fashion, Anglo American, Centrica, Rolls-Royce Holdings, and HSBC Holdings gained between 0.9% and 2.3%. Vodafone Group shares increased by over 1% after the telecom company sold an 18% stake in Indus Towers to reduce debt.

Conversely, Berkeley Group Holdings plummeted by more than 6%. Other decliners included Segro, Spirax Group, Persimmon, Barratt Developments, Taylor Wimpey, Scottish Mortgage, Land Securities, ICG, Burberry Group, Halma, Unite Group, Hikma Pharmaceuticals, and Intertek Group, which dropped between 1% and 3%.

In the German market, Sartorius plummeted by over 14%, Qiagen declined by 5.6%, Infineon fell by approximately 3.6%, and Merck decreased by 3.1%. Bayer, Beiersdorf, Puma, Porsche, Symrise, Fresenius Medical Care, and Zalando also recorded losses of 1% to 2%.

Siemens Energy gained about 1.7%, and BMW ended up by 1.1%.

In Paris, shares of STMicroElectronics fell 4.7%, and Dassault Systemes declined by 3%. Sanofi, TotalEnergies, Eurofins Scientific, Societe Generale, Essilor, Pernod Ricard, BNP Paribas, Bouygues, and L'Oreal also posted notable losses.

On the economic front, the Office for National Statistics reported that consumer price inflation in the U.K. eased to 2% in May, as anticipated, from 2.3% in April, marking the first time inflation hit the target since July 2021. Monthly consumer prices rose 0.3% in May, in line with the previous month and slightly below the expected 0.4% increase.

UK house prices saw their second consecutive month of growth in April, increasing by 1.1% annually, compared to a revised 0.9% rise in March, according to the Office for National Statistics. This marks the second successive month of annual price growth following eight months of declines.

The euro area's current account surplus rose to a three-month high in April, driven by trade in goods and services, the European Central Bank reported. The surplus totaled EUR 39 billion, up from March's EUR 36 billion.

Eurozone construction output declined for the second consecutive month in April, primarily due to weaker civil engineering projects. Construction output fell 0.2% month-on-month in April, following a revised 0.5% decline in March.