FX.co ★ European Shares Mostly Lower Ahead Of FOMC Meeting

European stocks displayed muted activity on Tuesday, as investors anticipated an update from the Federal Reserve regarding potential interest rate cuts. Despite this, a preliminary flash estimate from Eurostat indicated that the Eurozone's economy experienced expansion in the first quarter, following two successive declines. The economy, exhibiting significant resilience, saw a higher-than-anticipated growth of 0.3 percent, a positive leap after falling 0.1 percent in the final two quarters of 2023. Together, these figures exhibit the successful avoidance of a recession.

In a similar vein, the German economy successfully sidestepped recession, recording a higher than expected growth rate of 0.2 percent in the first quarter, compared to a revised decrease of 0.5 percent from the previous period. Inflation within the Eurozone tallied with predictions coming in at 2.4 percent in April, and 0.6 percent on a monthly basis.

However, the pan-European STOXX 600 descended by 0.3 percent to 506.67 after only moderate gains on Monday. The German DAX fell 0.4 percent, France's CAC 40 declined by 0.2 percent, while the FTSE 100 in the UK increased by 0.4 percent. This positive performance can be attributed to a series of impressive earnings updates, especially from HSBC and Hargreaves, as well as central bank data that revealed an 18-month high for approved mortgages in March.

In company news, Stellantis NV reported a 2.2 percent fall following a 12 percent decline in first-quarter revenue. Conversely, Logitech, a maker of computer parts, saw shares rocket by 7.8 percent after posting encouraging fourth-quarter results. HSBC Holdings also reported a 3.6 percent leap in London, stating that the bank plans to reinvest an additional $3 billion in its shares.

Despite this, both Glencore and Prudential suffered decreases in their shares, falling by 1 percent and 5 percent respectively. This was driven by reduced Q1 copper and coal output for the former, and a 17 percent plunge in Q1 annual premium equivalent sales for the latter. On the other hand, Whitbread - the owner of Premier Inn - experienced a surge of 2.8 percent after announcing plans to eliminate approximately 1,500 jobs in the UK.

Elsewhere, Hargreaves Lansdown's shares soared 5.7 percent, following the announcement that its AuM levels had risen by £7.5 billion to reach a record £149.7 billion between January and March. Airline Air France-KLM suffered a 3.4 percent slump due in part to Q1 operating losses deepening in 2024. Rexel, an electrical supplies distributor, also saw stocks fall by 2.8 percent after Q1 sales failed to meet expectations.

Despite a drop in earnings, German real estate group Vonovia's shares surged 4.6 percent after the firm affirmed its full-year outlook. Meanwhile, both Volkswagen and Mercedes-Benz reported a slump in performance. The former saw a 2 percent decrease after reporting a 20 percent drop in its Q1 operating profits for 2024 compared to last year, whilst the latter fell 3.8 percent following a reported 30 percent annual decrease in Q1 earnings. Finally, sportswear behemoth Adidas fell by 1.6 percent despite reinforcing its recently upgraded FY24 outlook.