European Stocks Muted as US-Iran Talks and Defence Developments Drive Markets
Market Overview and Key Drivers
Opening Sentiment and Major Indices
June 24 (Reuters) - European shares were muted at open on Wednesday, as investors assessed developments in the U.S.-Iran negotiations, while defence company Rheinmetall dropped after a media report that Germany is set to scrap plans to build its biggest warship since World War Two.
The pan-European STOXX 600 index edged 0.02% lower to 634.50 points by 0715 GMT.
Commodities and Geopolitical Factors
Oil Prices and US-Iran Negotiations
Crude prices were trading near $76 a barrel, at early-March levels, on hopes that oil tankers stranded in the Gulf will move out of the Strait of Hormuz following a peace deal between Washington and Tehran. [O/R]
However, caution prevailed amid disagreement between both countries on the key terms of the deal.
Monetary Policy Expectations
Traders were also watching for cues on the monetary policy path for major global central banks, as they priced in another 25 basis point interest rate hike by the European Central Bank by year-end, according to LSEG-compiled data.
Sector Performance Highlights
Aerospace & Defence Sector
Rheinmetall and TKMS Developments
On the STOXX 600, the aerospace & defence sector led declines, falling 1.7%, as German defence group Rheinmetall slipped 12.3% after a report said that the country is set to scrap plans to build its biggest warship since World War Two and intends to buy eight smaller frigates from rival TKMS. TKMS shares jumped 8.7%.
Real Estate Sector
Segro and Prologis Bid
The real estate sector gained the most on the benchmark, rising 2.4%, with Segro climbing 17% after U.S.-based Prologis took its $16.6 billion bid public after the UK warehouse landlord rejected the bid.
Technology Sector
Tech Recovery and Memory Stocks
The tech sector recovered and was up 0.3% after recording its biggest single-day drop in nearly five months in the previous session, as memory stocks in Asia rebounded, with South Korean shares rallying 3.3%.
Chipmaker Infineon rose 0.9%, and chip-equipment suppliers BE Semiconductor and ASML added 0.4% each.
(Reporting by Utkarsh Hathi and Johann M Cherian in Bengaluru; Editing by Mrigank Dhaniwala)
