European stocks were mixed on Wednesday, as investors remained cautious after the International Monetary Fund cut its forecast for global economic growth this year and markets eyed the minutes of the Federal Reserve's latest policy meeting.
Global equities were hit after the IMF downgraded its global growth forecast for both this year and next, due to stagnation in Europe and a weaker-than-forecast recovery in Japan.During European morning trade, the DJ Euro Stoxx 50 edged up 0.11%, France’s CAC 40 added 0.08%, while Germany’s DAX fell 0.27%.
The agency now sees 2014 global growth of 3.3% and 2015 growth of 3.8%, a decline of 0.1% for 2014 and 0.2% for 2015 from forecasts made in July.
Investor sentiment also weakened after a report on Tuesday showing a steep decline in German factory orders in August fuelled fears that the euro zone’s largest economy is falling into a recession.
Market participants were turning their attention to the minutes of the Federal Reserve’s September meeting, due out later in the day, for fresh indications on the future possible direction of U.S. monetary policy.
Financial stocks were mostly higher, as French lenders BNP Paribas (PARIS:BNPP) and Societe Generale (PARIS:SOGN) added 0.18% and 0.08%, although Germany's Deutsche Bank (XETRA:DBKGn) slipped 0.27%.
The German lender was still affected by reports on Tuesday that U.S. prosecutors are discussing whether to press the bank to plead guilty to interest-rate rigging.
Among peripheral lenders, Italy's Intesa Sanpaolo (MILAN:ISP) and Unicredit (MILAN:CRDI) edged up 0.13% and 0.29%, while Spanish banks BBVA (MADRID:BBVA) and Banco Santander (MADRID:SAN) gained 0.21% and 1.01%.
Elsewhere, Air France KLM (PARIS:AIRF) saw shares plunge 4.91% after saying that the worst strike in its history, which brought many flight cancellations for two full weeks last month, may cut profit this year by €500 million.
In London, commodity-heavy FTSE 100 slid 0.23%, weighed by losses in the mining sector.
Rio Tinto (LONDON:RIO) fell 0.25% and Bhp Billiton (LONDON:BLT) declined 0.39%, while Fresnillo (LONDON:FRES) dropped 0.54% and Vedanta Resources (LONDON:VED) saw shares tumble 0.54%.
Rio Tinto made headlines on Tuesday, when it said that it had rejected a merger offer from Glencore Xstrata (LONDON:GLEN), down 0.02%, in August.
Financial stocks were also mostly lower, as Barclays (LONDON:BARC) edged down 0.17% and the Royal Bank of Scotland (LONDON:RBS) slid 0.60%, while Lloyds Banking (LONDON:LLOY) retreated 0.66%. HSBC Holdings (LONDON:HSBA) overperformed however, up 0.74%.
On the upside, Tesco (LONDON:TSCO) surged 3.15%, leading gains on the index, following reports on Tuesday that the British grocer has asked its commercial director Kevin Grace to step down.
In the U.S., equity markets pointed to a higher open. The Dow 30 futurespointed to a 0.14% gain, S&P 500 futures signaled a 0.22% increase, while the NASDAQ 100 futures indicated a 0.15% rise.
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