European stocks have mixed early performance, with a big gap between sharp gains for tech stocks and small-cap gains ahead of a key central bank decision, overshadowing a major deal by NEX Group.
The STOXX 600 rose as much as 0.7% but eased into the red after six straight days of gains, down 0.1%.
Europe’s two leading technology groups — Ibex (XTC:IBIOM) and FTSE MIB (XFC:FTE) — advanced 1.7% and 1.6%, respectively, after analysts raised estimates on Cineworld Group following an investment in Expedia. That move broke a 5-day winning streak by European tech stocks.
Meanwhile, Germany’s DAX (XDA:DOG) dipped into the red ahead of a central bank meeting by the European Central Bank. Investors widely expect the central bank to keep interest rates unchanged but the decision on whether to extend its bond purchases is another story.
“Our core view is that the ECB will reiterate that there would be another interest rate hike in the coming quarters,” said Commerzbank analysts. “We might also see a press conference Q&A in which the ECB will acknowledge that we had turned away from the bond-buying program earlier than we expected and hence tighten its communication. We therefore assume that the ECB will keep interest rates unchanged but announce that it is starting the process of raising interest rates in a few months.”
Other analysts predict a more straightforward statement on the central bank’s plans to continue its bond purchases, as well as a softening in the language in describing the outlook. That result would likely keep the pace of stimulus — and expectations of future stimulus — on investors’ minds.
In London, HSBC’s Villeroy & Boch and Spain’s Banco Santander (SH:SAN) fell after reporting disappointing earnings. HSBC (SHA:HSBA) dropped 1.7% and Santander (SAN:SAN) fell 2.3% as they reported forecasts-busting results. Spanish banks have led European bank stocks higher recently.
Chinese tech giant Tencent (TCEHY:TCEHF) fell as much as 2.1% after the expiration of its move into a US unicorn. Another tech firm, Spotify (SPOT:SPOT), saw its stock grow more than 4% on strong first-quarter earnings that included a surprise uptick in subscriber numbers.
Shares of German equipment maker Siemens (SIE) climbed 1.8% after it reported healthy fiscal fourth-quarter earnings and raised its full-year guidance.
In Europe, U.S. stock futures suggest a negative open for Wall Street in Thursday’s session. Dixons Carphone (DC:DIXNY) rose 5.6% after the company said it recovered from the collapse of BHS with strong trading in electrical goods.
Chipmaker Nvidia (NVDA) is expected to report after the bell as it attempts to ramp up for growth.
Asian stocks rebounded on Wednesday after the death of South Korean President Kim Jong-un brought a global calm to recent trade tensions.