Jan 26 - European share markets showed only minimal movement on Monday as investors maintained a cautious stance ahead of a crucial U.S. Federal Reserve policy announcement scheduled for later in the week. By 0803 GMT the pan-European STOXX 600 benchmark had inched 0.06% higher, reflecting a market environment where traders were reluctant to take big positions amid lingering geopolitical and policy uncertainty.
Sector performance was mixed. Insurance stocks outperformed, climbing around 0.7%, while travel and leisure issues lagged, slipping approximately 0.6%. Automobile shares were slightly lower on the session, adding to the pockets of weakness across the benchmark.
Market participants remain mindful of recent geopolitical turbulence tied to tariff rhetoric that surfaced last week. The episode originated from tariff threats linked to Greenland that briefly unsettled trading conditions before the specific threat was withdrawn. Despite the withdrawal, investors continue to debate what it could mean for global commerce if tariffs were to be used routinely as a bargaining tool, a debate that has kept risk appetites in check.
Attention is also firmly on the Federal Reserve. The central bank is widely expected to keep interest rates unchanged when it announces policy later this week. Alongside the anticipated rate hold, market commentary suggests scrutiny will fall on questions about the Fed's independence, a theme likely to shape investor reaction regardless of the rate outcome.
On individual movers, shares of French food and beverage company Danone fell 2.6% after the company announced on Friday that it was recalling specific baby formula batches in targeted markets. The recall weighed on the stock as investors digested the operational and brand implications.
Separately, plans were reported indicating India intends to reduce tariffs on cars imported from the European Union to 40% from levels that have been as high as 110%. The proposed cut has potential implications for auto market dynamics and cross-border trade flows, feeding into the broader discussion on tariffs and trade policy.
With the market sitting in a wait-and-see posture, modest index moves and selective sector rotations characterized the trading day as investors prepared for the upcoming policy signal from the U.S. central bank.