European stock exchanges were showing a moderate decline by midday on Wednesday as market participants awaited clearer indications regarding the proposed rate cut by the Federal Reserve. The financial sector displayed some resilience, however, with bank stocks inching upwards, contrasting with underperformance in the food and technology sectors. Traders were also keeping an eye on Wall Street futures, which were pointing to modest gains, amidst a backdrop of mixed performances on Asian markets overnight.
The construction output index in the Eurozone remained stable from June to July, while broader European construction output increased slightly by 0.2%, according to Eurostat. Year-over-year comparisons highlighted a decline in construction output, with the Euro area facing a 2.2% drop and the EU facing a 2.4% decrease in July. During the mid-session analysis, the pan-European Stoxx Europe 600 Index fell by 0.5%.
In more sector-specific terms, the Stoxx Europe 600 Technology Index was down 0.6%, while the Stoxx 600 Banks Index saw a slight rise of 0.2%. The Stoxx Europe 600 Oil and Gas Index dipped by 0.2%, and the Stoxx 600 Europe Food and Beverage Index experienced a decline of 0.7%. Additionally, the REITE, which tracks European real estate investment trusts, fell by 0.2%, and the Stoxx Europe 600 Retail Index lost 0.4% of its value. Breaking it down by national indexes, Germany's DAX showed a minor decrease of 0.1%, while the FTSE 100 in London recorded a decline of 0.7%.
Meanwhile, the CAC 40 in Paris slipped by 0.4%, and Spain's IBEX 35 registered a loss of 0.2%. Meanwhile, yields on benchmark 10-year German bonds rose slightly to approximately 2.17%, reflecting some shifts in investor sentiment. Front-month North Sea Brent crude oil futures saw a drop of 1.3%, trading at $72.75 per barrel. The Euro Stoxx 50 volatility index advanced by 2% to a level of 16.91, indicating a reassuringly low volatility outlook for European stock markets over the next 30 days.
A reading above 20 typically signifies potential upheaval in the market, whereas a figure below 20 indicates a more stable trading environment..