European stocks edge lower as oil dips; Fed in focus

Big 5

European stocks edged lower on Wednesday as global investors tread cautiously, considering the timing of the next interest rate hike by the U.S. Federal Reserve as well as the outlook for oil prices.

The pan-European STOXX 600 was down 0.31 percent.

Fed hike timing in focus

Investors were digesting the likelihood of an imminent rate hike by the Fed after U.S. second-quarter productivity unexpectedly fell by 0.5 percent. Economists polled by Reuters expected a gain of 0.4 percent.

The subdued start expected in Europe mirrored uncertainty seen on Wednesday in Asia, where shares were mixed as traders eyed moves in oil prices ahead of a flurry of Chinese data later in the week.

Chinese mainland markets were flat to mildly lower, with the Shanghai composite down 0.1 percent while the Shenzhen composite was unchanged, as investors awaited important data out of China due Friday, including industrial production, fixed asset investment and retail sales.

Oil slides

Oil markets remain in focus for markets amid renewed expectations that OPEC members, due to meet in September, could once again discuss a production freeze. Prices fell on Wednesday with a global supply overhang weighing on markets. OPEC releases its monthly oil market report on Wednesday.

The oil and gas sector was sharply lower as a result.

Elsewhere, Austrian energy firm OMV announced plans to cut investments and costs after it said second-quarter clean current cost of supplies (CCS) EBIT – a key metric for the business similar to operating profit – beat market expectations, sending shares lower.

Other names including Statoil and Amec Foster Wheeler were in the red.

Novozymes slides 9 percent

Investors were also focused on earnings once again. Denmark’s Novozymes cut its outlook for full-year organic sales growth after it reported earnings before interest and tax (EBIT) that missed analyst expectations. Shares of the firm fell nearly 10 percent.

Recruitment firm Adecco posted a 7 percent rise in net profit for the second quarter, sending shares higher.

And Germany’s E.ON fell into negative territory after it posted a more than 3 billion euro ($3.3 billion) loss in the first half of 2016 compared to a 1.15 billion euro profit a year earlier thanks to charges related to its power plant unit Uniper.

Meanwhile, British security firm G4S rallied after it posted an 8.2 percent year-on-year rise in first-half core earnings.

Source: CNBC