Europe's main stock markets ended the day lower on Wednesday, after trading with little fluctuation as the day was observed as a public holiday in the United States and attention turned to central bank meetings.

In Paris, the CAC 40 lost 0.77% to 7,570.20 points, while in Frankfurt, the Dax was down 0.36%. By contrast, London's FTSE 100 gained 0.17%.

The EuroStoxx 50 index ended down 0.61%, the FTSEurofirst 300 0.15% and the Stoxx 600 0.18%.

The session was quiet on Wednesday, with no trading on the New York Stock Exchange, closed for the commemoration of the abolition of slavery in 1865, which limited trading volumes on the open financial markets.

Markets also turned their attention to central banks, with the Bank of England (BoE), Norges Bank and the Swiss National Bank (SNB) all set to announce their monetary policy decisions on Thursday.

In the UK, the BoE is expected to welcome the return of inflation to its 2% target in May, the first time this has happened in almost three years, although underlying price pressures persist and markets are not expecting rate easing until September or October.

In France, investors continue to assess the risks to public finances of a far-right government following early parliamentary elections. While the yield differential between German and French 10-year bonds has narrowed in recent days, it is likely to remain under pressure until the elections.

On Wednesday, the European Commission announced the opening of a procedure for excessive public deficits against seven countries in the bloc, including France, whose deficit reached 5.5% of GDP in 2023.

While this decision is far from a surprise, it could attract "significant" attention, given the fragility of sentiment in France, notes Piet Haines Christiansen, analyst at Danske Bank.


In Paris, Dassault Systemes SE lost 3.09%, the red lantern of the CAC 40, as Exane BNP Paribas lowered its recommendation to "underperform" from "neutral".

Banks Société Générale, Crédit Agricole SA and BNP Paribas fell by between 0.6% and 1.6%, underperforming the European compartment, which gained 0.25%.

Despite the uncertainty in France, Barclays' analysts maintained their positive opinion on European banks on Wednesday.

German solar power components group SMA Solar Technology AG, which issued a profit warning for the year, shed 31%,


The foreign exchange market was fairly stable at the close of trading in Europe.

The dollar lost 0.05% against a basket of reference currencies, while the euro gained 0.08% to $1.0747.

The European currency remains close to its recent lows, due to concerns that a possible new government in France could weaken budgetary discipline and push up debt risk premiums in the eurozone.

Sterling gained ground (+0.09%) against the dollar, after data showed that UK services inflation was stronger than expected in May.


Eurozone bond yields rose on Wednesday, while the risk premium demanded by investors to hold French bonds remained stable after last week's turbulence.

The yield on the ten-year German Bund rose by 1.3 basis points to 2.4060%, while that on the ten-year OAT advanced by 3.6 basis points to 3.1558%.

The yield on ten-year Italian government bonds gained 6.2 basis points to 3.1578%.

The spread between French and German 10-year yields stood at 74 basis points, up 2 bp on Tuesday, but below the 80+ bp reached last week.


Oil prices held steady after hitting a seven-week high on Wednesday, as optimism about summer demand and worries about escalating conflict in the Middle East offset an industry report showing that US crude inventories rose unexpectedly.

Brent crude fell by 0.14% to $85.21 a barrel, while West Texas Intermediate (WTI) lost 0.17% to $81.43.


The Bank of England will announce its monetary policy decision at 1:00 pm.

Stocks to watch on the Paris Bourse and in Europe (Written by Diana Mandiá, edited by Blandine Hénault)