By Shashwat Chauhan, Jesús Calero and Shristi Achar A
(Reuters) – European shares closed lower on Wednesday, pressured by losses in property and technology stocks, while UK shares were boosted by metal miners as investors digested their inflation data.
The pan-European sector closed down almost 0.2%, with the real estate sector falling 1.2% and technology stocks falling 1.1%.
Basic resources stocks rose 0.6%, tracking a rally in metals prices and leading sector gains. (MET/L)
100 reversed earlier losses to close up 0.2%. Data showed UK inflation returned to its 2% target in May for the first time in almost three years, but underlying price pressures remained strong, meaning the Bank of England (BoE) is likely ) wait longer before cutting interest rates.
“Economies are stagnant, but not worse. So the cost of being too dovish on inflation and seeing it re-accelerate is a bigger risk for (the Bank of England) than keeping things tighter for one or two more meetings in search of more data,” said Richard Flax, chief investment officer at Moneyfarm.
Market attention will now turn to interest rate decisions by the central banks of Britain, Norway and Switzerland later this week.
European stocks suffered heavy losses last week after France's president called early elections, with their high debt levels a source of concern for market participants.
The European Commission said France and six other countries should be disciplined for running budget deficits that exceed European Union limits, and that deadlines for closing the gaps will be set in November.
The latest polls suggest that Marine Le Pen's far-right National Rally party is ahead ahead of the first round of French parliamentary elections.
The French benchmark index closed almost 0.8% lower.
Travel and leisure stocks added 0.6% to the pan-European index, boosted by a 1.4% rise in Accor (EPA:) after Barclays upgraded the hotel group to “overweight” from “equal weight.”
SMA Solar technology AG plunged 31% after the German solar parts supplier cut its profit forecast, citing political uncertainty.
Belgian metal recycling group Umicore jumped 3.4% thanks to a double upgrade from JP Morgan.
Trading was light in the absence of American participants, as markets were closed for a holiday.
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