Europe stocks close lower; Royal Mail owner IDS up 4% on sale agreement

Anglo American is likely to create “a lot of additional value” from its restructuring, said John Meyer, partner at SP Angel.

Meyer noted that higher copper prices are on the way and that the rise in prices is why BHP Group is keen to buy Anglo American.

The British miner is “cheap” and that’s why BHP Group wants to buy the rival firm, he said.

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— April Roach

Consumer confidence in Germany and Italy ticked higher in May, while French sentiment was flat and Portugal’s declined, a range of surveys showed.

Market research firm GfK said German households’ assessment of the economic outlook increased significantly and the overall consumer climate improved for a fourth straight reading, though people were only slightly less willing to spend.

France’s national statistics agency Insee found household confidence was “stable,” as Italy’s Istat said its consumer confidence index rose “thanks to a rise in all its components,” particularly economic confidence.

Portuguese households were also more optimistic on the economy in May, but overall consumer confidence fell after hitting the highest level since February 2022 in April, Statistics Portugal said.

— Jenni Reid

Shares of Anglo American were down 0.84% at 10:59 a.m. in London, trimming earlier losses after the British miner rejected a request from BHP Group to extend takeover talks.

The rival miners have until 5 p.m. London time Wednesday to reach a decision on BHP’s latest offer for Anglo, following a week-long extension of last week’s deadline.

BHP had requested a further prolongment of talks earlier on Wednesday, saying it “believes a further extension of the Deadline is required to allow for further engagement on its proposal.” 

Anglo said BHP’s latest offer for its business failed to address the board’s “fundamental concerns relating to the disproportionate execution risk” surrounding the deal, and that an extension beyond Wednesday’s deadline would not be granted.

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— Karen Gilchrist, Jenni Reid

Swedish aerospace and defense firm Saab was 5.6% lower in mid-morning deals, after Sweden’s defense minister said the country was pausing plans to send Saab-made Gripen fighter jets to Ukraine.

Ukraine’s military backers want instead to focus on introducing U.S.-made F-16 aircraft, Pal Jonson told news agency TT.

European stocks opened lower on Wednesday, with the Stoxx 600 index 0.2% lower at 8:22 a.m. in London.

France’s CAC 40 index fell 0.35%, Germany’s DAX dipped 0.2%, and the U.K.’s FTSE 100 was just below the flatline.

BHP Group on Wednesday said it believes an extension to talks with takeover target Anglo American is necessary, as the deadline for discussions looms later in the session.

The Australian miner said in a statement that it had proposed a number of “socioeconomic measures” to address concerns over its bid, but added that more time was needed to discussions.

The offer values the company at £38.6 billion ($49.2 billion), according to previous Reuters calculations.

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— Karen Gilchrist

For many investors, the million-dollar question is how far Nvidia can go or whether it can sustain its dramatic growth.

Nick Griffin, chief investment officer at Munro Partners, has invested in Nvidia since 2019 – but even he is taken aback by the stock’s astronomical run so far.

“I have never seen anything like this in terms of the dramatic earnings acceleration it’s displaying … it’s never happened before to a company of this size, and it’s unprecedented,” he said Tuesday.

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— Weizhen Tan

Investor darling Nvidia is dominating headlines once again after its earnings last week surpassed expectations on the back of the artificial intelligence boom.

Morgan Stanley notes that the reaction to Nvidia’s first quarter results is “very telling on how much buying power still exists in the market.”

“We are far from topping out on AI. This should be enough to sustain investor confidence in AI supply chain stocks in Asia,” the investment bank’s analysts wrote in a May 22 research note.

They named a number of overweight-rated stocks to play their favorite AI themes, including four with over 50% upside potential.

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— Amala Balakrishner

European stock markets are set to open lower on Wednesday, according to IG data.

The U.K.’s FTSE 100 was seen opening lower by 37.3 points at 8,225, France’s CAC 40 lower by 35 points at 8,019, and Germany’s DAX lower by 73 points at 18,614.

— Jenni Reid

Minneapolis Federal Reserve President Neel Kashkari told CNBC on Tuesday he is still not ready to cut interest rates.

“Many more months of positive inflation data, I think, to give me confidence that it’s appropriate to dial back,” he said. He also noted the central bank could raise rates if inflation does not continue to ease. “I don’t think we should rule anything out at this point.”

— Fred Imbert

European Central Bank Governing Council member Klaas Knot said Tuesday it will “soon” be appropriate to move toward less restrictive monetary policy, but that easing must go “slowly” and “gradually” from there.

Knot, head of the central bank of the Netherlands, said during a speech in London that he has “increasing confidence inflation will return to target in a timely manner.”

“Rates will slowly but gradually move into less restrictive levels,” he said.

Markets are betting on a June interest rate cut from the ECB following firm signaling from policymakers, with just one further cut this year.

“The precise timing, speed and scale of easing will have to follow a data-dependent approach, with our projections and the labor market being a key ingredient,” Knot said.

Recent data suggests wage growth will remain “bumpy” this year, Knot added, meaning the next round of ECB projections on growth and inflation in June will be crucial for determining the path ahead.

— Jenni Reid

The Nasdaq Composite touched a new record in Tuesday’s session. At one point, the tech-heavy index surpassed the 17,000 mark for the first time ever.

It comes near the end of a strong month, with the index rising more than 8% so far in May.