European Shares To Drift Lower In Cautious Trade; BOE Meeting Eyed

European stocks may drift lower at open on Thursday after the U.S. Federal Reserve signaled openness to future rate cuts, adding a March rate cut is unlikely.

The Bank of England’s policy meeting takes center stage today, with the central bank expected to hold interest rates for the fourth time in a row and deliver a brighter outlook for the U.K. economy.

Trading later in the day may also be impacted by reaction to the release of reports on weekly jobless claims, manufacturing activity and construction spending ahead of the all-important January jobs report, due Friday.

On the earnings front, Merck, Peloton Interactive and Royal Caribbean will unveil their earnings before the opening bell while mega-cap tech companies Amazon, Apple and Meta Platforms will report after the closing bell.

Asian markets traded mixed as traders locked in recent profits.

China’s 100 largest developers recorded a deep slump in new-home sales in January, raising concerns about a deepening property market crisis.

However, a private survey showed that activity in China’s manufacturing sector continued to grow in January with a further recovery in demand.

The dollar hovered near a seven-week high, and gold edged up slightly while oil held gains after closing sharply higher in the overnight U.S. trading session amid worries about demand from China and a surprise build in U.S. crude inventories.

U.S. stocks tumbled overnight as Alphabet and Microsoft forecast rising artificial intelligence costs, ADP private sector jobs data disappointed and the Fed dashed investor hopes for a March rate cut amid ‘elevated’ inflation.

The tech-heavy Nasdaq Composite plunged 2.2 percent, the S&P 500 slumped 1.6 percent and the Dow dropped 0.8 percent.

European stocks ended Wednesday’s session mostly lower amid losses in the technology sector.

The pan European STOXX 600 finished marginally higher as investors reacted to inflation figures from Germany and France as well as dovish comments from ECB officials.

The…