By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets wavered around
the flat line on Wednesday as investors remained cautious ahead of
European Parliament elections and euro-zone PMIs due later in the
week.
The Stoxx Europe 600 index rose 0.1% to 338.58, setting it on
track for its first gain in three days.
Posting one of the biggest losses in the benchmark, shares of Wm
Morrison Supermarkets PLC dropped 3.1% after Deutsche Bank cut the
food retailer to sell from hold. The analysts argued that after a
10% rally over the past two weeks, there aren't enough strong
fundamentals to push the stock higher.
Shares of BNP Paribas SA gave up 1.6% after HSBC cut the French
bank to neutral from overweight and after Bloomberg reported U.S.
authorities are seeking $5 billion from the company to settle a
probe into sanctions violations.
On a more upbeat note, A.P. Moeller-Maersk A/S gained 3.8% after
the Danish oil and shipping giant upgraded its full-year outlook
after posting a 62% increase in first-quarter profit.
European Parliament elections
More broadly, investors were hesitant of making big moves ahead
of elections for the European Parliament. The FTSE 100 index
slipped 0.2% to 6,790.26, while France's CAC 40 index fell 0.3% to
4,440.61. Germany's DAX 30 index rose 0.1% to 9,649.95.
The elections kick off on Thursday, when voting begins in the
U.K. The last countries vote on Sunday, and the results from all 28
member states should start to be revealed on Sunday night.
After a period of low growth and tough austerity measures,
euroskeptic parties are expected to get more seats in parliament
than ever, which could turn out to be a decisive factor in Europe's
future. However, several economists note that the anti-European
parties are opposing the EU for different reasons, which could make
it hard for them to join forces and actually pose a threat to
further European integration.
"The risk of anti-European parties winning strong support is
counterbalanced by their heterogeneity and lack of majority,"
analysts at Société Générale said in a note ahead of the
elections.
BOE minutes
In the U.K. on Wednesday, minutes from the Bank of England's May
policy meeting showed all nine members of the Monetary Policy
Committee voted in favor of keeping rates at a record low of 0.5%
and making no changes to the bank's quantitative-easing program.
Analysts noted that the minutes showed a more hawkish tone, as
there was a "range of views" on the Monetary Policy Committee and
that "for some members the monetary policy decision was becoming
more balanced."
Nick Beecroft, senior market analyst at Saxo Capital Markets,
said in emailed comments that we should expect to see the first
dissenting votes emerge over the next quarter.
"But maybe as early as next month if this morning's release
showing a surge in retail sales in April is indicative of an
acceleration in growth," he added.
The pound (GBPUSD) rose after the minutes, trading at $1.6893,
up from $1.6842 late Tuesday.
Also on investors' minds on Wednesday were euro-zone
consumer-confidence data due at 3 p.m. London time, or 10 a.m.
Eastern Time.
On Thursday, euro-zone purchasing managers' indexes will be
released. Any weakness in the data could increase bets that the
European Central Bank will loosen monetary policy at its June
meeting, as ECB policy makers have hinted heavily that they're
ready for some easing action.
More must-reads from MarketWatch:
Microsoft bills new Surface tablet as laptop-killer, aiming at
Apple
She fought Wall Street, and now she's off to jail
'Happy' Iranians arrested for dance video that 'hurt public
chastity'
Subscribe to WSJ: http://online.wsj.com?mod=djnwires