(C) Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, June 8, 2021. REUTERS/Staff/File photo
By Sruthi Shankar
(Reuters) -European stocks steadied near record highs on Wednesday, with investors holding off on taking big bets ahead of a policy decision from the European Central Bank and U.S. inflation reading later this week.
The pan-European STOXX 600 index slipped 0.1% in morning trade, but stayed just short of a record high of 455.66 hit in the previous session.
The wider travel and leisure index rose 0.7% as many European economies charted their way out of COVID-19 lockdowns.
Still, worries about rising inflation remained on investors’ minds after data earlier showed China’s factory gate prices rose at their fastest annual pace in over 12 years in May, driven by surging commodity prices.
Focus will be on the U.S. consumer prices data on Thursday, a reading that could influence market expectations on the U.S. Federal Reserve tapering its massive bond purchases programme ahead of its meeting next week.
Despite an economic recovery underway and price pressures rising, the ECB is likely to say that it will maintain the current pace of bond purchases at its policy meeting on Thursday.
“Inflation is creating uncertainty about what central banks will do or say going forward,” said Emmanuel Cau, European equity strategist at Barclays (LON:BARC).
“We think central banks will be patient, but we also believe that an adjustment in communication about inflation and policy changes will start in summer.”
Spanish retail giant Inditex (MC:ITX) reversed early gains made after beating first-quarter net profit expectations. Its shares were down more than 1%.
French food group Danone slipped 1.9% after RBC downgraded the stock to “underperform”.
Oslo-based salmon farmer SalMar fell about 5% to the bottom of STOXX 600 after it completed a private placement deal.
European shares loiter around peaks; travel stocks shine on recovery prospects
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