Europe markets opened lower on Wednesday as weak economic data and cautious comments from US Federal Reserve Chair Jerome Powell dragged sentiment, extending overnight losses from Wall Street and Asia.
The downtrend marked the middle of the week with markets showing little appetite for dip-buying despite selective sector gains.
The FTSE 100 slipped 26 points to 9,197 in early trading, even as defence companies and utilities provided some support.
The London benchmark had already closed slightly lower on Tuesday at 9,223.32, and futures signalled a 14-point drop ahead of the session.
German and French indices were also in negative territory as regional investors digested a combination of economic figures and global central bank signals.
FTSE pressured despite defence support
In London, defence companies BAE Systems and Babcock gained ground, buoyed by US President Donald Trump’s support for Ukraine’s counter-offensive against Russia.
The rise helped to cushion part of the decline, though bigger fallers such as Burberry, Barclays, Entain, and IMI weighed heavily.
Other gainers included utilities, precious metals miners, and grocers, sectors that often attract flows during risk-off trading. Still, the broad picture remained one of weakness as European investors tracked global equity declines.
Wider European markets mirror losses
The pan-regional STOXX 600 futures slipped 0.4% to 5,470, while German DAX futures dropped 0.3% and FTSE futures were also down 0.3%.
The retreat echoed the absence of strong buying support in US futures, which traded flat after Tuesday’s losses.
European weakness reflected broader global caution. While Asia’s MSCI Pacific ex-Japan index lost 0.2% by midday, Europe carried forward the sentiment with sharper declines in individual sectors.
Japan’s Nikkei also slipped 0.5% after a drop in manufacturing activity, while Australian shares fell nearly 1% after inflation accelerated.
Data and auctions in focus
German equities will be influenced later in the day by the Ifo business climate index for September, covering current conditions and expectations.
Broader sentiment may also be shaped by upcoming debt sales, with Germany auctioning seven-year government bonds and the UK offering four-year debt.
The day’s data from the US, including new home sales for August and the EIA’s weekly crude oil stocks, could also feed into market direction, though European indices remain primarily focused on domestic signals.
Market backdrop shaped by policy signals
Powell’s restrained remarks offered no strong indication of the Fed’s next steps on interest rates, leaving markets without clear direction.
Investors in Europe reacted by pulling back from cyclical sectors and favouring defensive plays, underlining uncertainty as the final quarter approaches.
Beyond Europe, New Zealand named Anna Breman as its first female central bank governor, a leadership shift watched by global investors though without direct impact on European markets.
Meanwhile, media and political developments in the US, such as the reinstatement of talk show host Jimmy Kimmel, added noise but no significant influence on regional equities.
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