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12 Mar 2021 | 15:32

Europe close: Light selling ahead of Fed rate meeting next week

(Sharecast News) - European shares finished a very strong week on a mixed note as longer-term government bond yields in the US snapped higher again. Nevertheless, the reason behind the latter was President Joe Biden's pledge that all Americans would be eligible for vaccination against Covid-19 by 1 May - an obvious positive in more general terms.

In any case, investors were already looking out to the following week's rate meetings at the US Federal Reserve and Bank of England.

"Next week sees Fed, BoE and BoJ meetings, all but guaranteeing more comment on the situation in global bond markets, and of these three the Fed will of course take centre stage," said IG chief market analyst Chris Beauchamp.

"Markets continue to doubt Jerome Powell's reiteration of the Fed's policy stance, so next week will doubtless see a rather exasperated chairman attempt to set out his stall once again while being questioned on how soon they will raise rates."

The pan-European Stoxx 600 index dipped 0.26% to 423.08, alongside a 0.46% fall for the German Dax to 14,502.39.

France's Cac-40 however gained 0.21% to 6,046.44 and Spain's Ibex 35 was up 0.6% to 8,644.5.

Yields on the benchmark 10-year Bund were only a tad higher, by three basis points to -0.3%.

Banks were the best performing group on the Stoxx 600, adding 1.3%, while Technology fared worst, losing 2.11%.

In equity news, British luxury goods group Burberry topped the gainers, jumping 7% after lifting full year guidance as sales had rebounded strongly since December.

German carmaker Daimler slipped after French rival Renault sold its entire stake in the company at a discount.

Hammerson shares were up 7% too, despite the shopping centre owner reporting a more-than-doubling of annual losses as the value of its properties dropped and rental income plunged during the Covid-19 crisis.

Meanwhile, shares in housebuilder Berkeley Group fell almost 6% after the firm said it was on track to report annual pretax profit similar to the £504m achieved the year before based on "robust" trading in the four months to the end of February.

Forward sales are expected to be more than £1.7bn at the end of the year on 30 April putting the housebuilder in a strong position to start the next financial year.
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