Renault supports European shares ahead of Fed rate outcome (updated)
18/12/2024 09:49
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Renault jumps on Honda-Nissan alliance report
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Fed seen cutting rates, outlook in focus
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Commerzbank climbs as Unicredit ups stake
(Updates with London morning prices)
By Sruthi Shankar
Dec 18 (Reuters) - European stocks edged higher on
Wednesday, lifted by Renault on talks of a potential merger
between Japan's Honda 7267.T and Nissan 7201.T , though gains
were capped on caution ahead of the Federal Reserve's policy
decision and outlook.
The pan-European STOXX 600 .STOXX was up 0.1% by 0925 GMT,
while stocks in Asia were also in a wait-and-watch mode.
French carmaker Renault RENA.PA rose 6%, leading gains on
the STOXX 600, after a report of a possible tie-up between
Japan's top carmakers. Renault owns a 36% stake in Nissan.
The Fed is widely expected to cut rates by 25 basis points
(bps) later on Wednesday, in what some observers are calling a
"hawkish cut", set to be delivered alongside policymakers'
updated interest rate outlooks and economic forecasts.
U.S. Treasury yields have, meanwhile, climbed to multi-week
highs, weighing on global stocks recently, as investors scaled
back bets on the pace of Fed rate cuts next year.
"Recent macro data suggest (U.S.) economy activity remains
resilient, that the softening of the labor market is contained
and that progress on disinflation has stalled over the last few
months," Unicredit analysts said in a note.
"It likely means that a slower (the new buzzword is
"gradual") pace of rate cuts lies ahead, which we anticipate
will mean one 25bp cut per quarter in 1H25 while data dependence
is maintained."
The UK's FTSE 100 .FTSE rose 0.4% on Wednesday as sterling
came under pressure ahead of the Bank of England's (BoE) rate
decision on Thursday, where it is expected to keep rates on
hold.
British inflation hit an eight-month high in November, but
the rise in services prices - watched closely by the BoE as an
underlying measure of inflationary pressures - held steady,
offering the central bank a little bit of relief.
Among other stocks, Commerzbank CBKG.DE jumped 3.3% after
Italian bank UniCredit CRDI.MI said it had raised its
potential stake in the German lender to 28% by signing new
derivatives contracts.
British fintech firm Wise WISEa.L advanced 4.2%, touching
a more than three-year high.
Grenergy GREG.MC surged 19.2% after the Spanish renewables
company agreed to sell an asset portfolio in Chile to
ContourGlobal, a KKR company KKR.N , for an enterprise value of
$962 million.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Sonia
Cheema)
((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223
8780; outside U.S. +91 80 6182 2787;))