European markets opened Thursday in cautious mood, with major indices edging lower amid persistent geopolitical tensions and renewed uncertainty around central bank policy. The London Stock Exchange followed suit, opening in the red as investors digested a wave of international developments and awaited key economic data later in the week.
The pan-European Stoxx 600 dropped around 0.4% in early trading, weighed down by losses in banking and industrial sectors. Germany’s DAX and France’s CAC 40 both slipped by 0.3%, while Italy’s FTSE MIB showed marginal gains, supported by defensive energy stocks. Market sentiment was dented by continued fallout from geopolitical flare-ups in the Middle East and speculation over potential rate adjustments by the European Central Bank.
In London, the FTSE 100 opened roughly 0.5% lower, pulled down by mining and financial stocks. Investors reacted to disappointing overnight figures from Asia and subdued performances on Wall Street, combined with ongoing concerns about the implications of the UK government’s revised spending plans ahead of next week’s general election.
Among notable movers, BP and Shell both traded lower despite stabilising oil prices, reflecting broader risk-off sentiment. Meanwhile, UK housebuilders like Barratt Developments and Taylor Wimpey underperformed following weaker-than-expected mortgage approvals data released this morning.
The pound held relatively steady against the dollar but weakened slightly versus the euro, reflecting mixed confidence ahead of upcoming UK inflation and GDP data. Bond markets were flat, though traders continued to price in a potential rate cut from the Bank of England later this year if economic indicators soften further.
Analysts noted that European equities remain caught between resilient macro data and looming political uncertainties, particularly surrounding the French snap elections and German fiscal pressures. Investors are also closely watching speeches from ECB officials today, which may offer fresh clues on inflation management and balance sheet policies.
With the US releasing updated GDP figures later today and the first round of France’s elections just days away, market participants are likely to remain defensive and selective in their positioning.
REFH – newshub finance
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