European Stocks Close Lower After Cautious Session

European stocks closed broadly lower on Monday after a cautious session as investors awaited the monetary policy announcements from the Bank of England and the U.S. Federal Reserve.

The Fed is widely expected to announce an interest rate cut on Wednesday. The focus will be on the size of reduction, and the central bank’s accompanying statement that could provide clues about possibility of further cuts in the coming month.

The Bank of England is scheduled to announce its monetary policy on Thursday.

The pan European Stoxx 600 ended down 0.16%. The U.K.’s FTSE 100 edged up 0.06%, Germany’s DAX and France’s CAC 40 closed lower by 0.35% and 0.21%, respectively, and Switzerland’s SMI ended down 0.26%.

In the UK market, Phoenix Group Holdings dropped more than 5%. Melrose Industries ended 2.57% down, and Spirax Group closed down 2%.

Scottish Mortgage, Prudential, Sage Group, Entain, Beazley, Croad International and Rolls-Royce Holdings closed lower by 1 to 1.5%.

JD Sports Fashion climbed 3.6%. Marks & Spencer ended nearly 3% up, while Kingfisher, Associated British Foods, Tesco, Sainsbury (J), Diploma, IG, 3i Group, Hargreaves Lansdown, Fresnillo, Vodafone Group, Compass Group and Next ended up 1 to 2.2%.

In the German market, Sartorius and Infineon, both ended lower by about 2.5%. Brenntag, Volkswagen, Fresenius, Covestro, Merck, Fresenius Medical Care, BMW, RWE, MTU Aero Engines and Bayer closed down 1 to 2%.

Zalando climbe nearly 2%. E.ON, HeidelbergCement, Hannover Rueck, Qiagen and Porsche posted moderate gains.

In the French market, STMicroElectronics ended down by about 3.6%. Dassault Systemes, Capgemini, Kering, Edenred, Teleperformance and Hermes International lost 1 to 2%.

Bouygues, Veolia, Unibail Rodamco, Carrefour, Engie, Societe Generale, Legrand and Pernod Ricard closed higher.

In economic news, the euro area trade surplus increased notably in July due to the sharp rebound in exports, Eurostat reported Monday. On an unadjusted basis, the trade surplus rose sharply to EUR 21.2 billion in July from EUR 6.7 billion in the same period last year. In June, the surplus was EUR 21.7 billion.

Eurozone hourly labor cost growth softened in the second quarter on slower wage growth, data released by Eurostat revealed on Monday. Hourly labor cost grew 4.7% on a yearly basis, slower than the 5% increase in the first quarter.

UK house prices increased in September as the traditionally busier Autumn market started early after the Bank of England’s interest rate cut lowered mortgage rates and the election results boosted confidence, data published by the property website Rightmove showed. House prices grew 0.8% on a monthly basis in September.

Switzerland’s producer and import prices continued to decline in August, though at the slowest pace in eight months. Producer and import prices dropped 1.2% year-on-year in August, slightly slower than the 1.7% decline in June. Prices have been falling since May 2023.