BERLIN, June 25 — European shares hovered just below record highs today as a slide in healthcare-related stocks more than offset a boost from the financial sector, although Credit Suisse rose after a Reuters report that it was considering a potential merger with UBS.
The pan-European STOXX 600 was flat by 0755 GMT, but was set to end the week modestly higher following sharp swings on concerns of higher inflation hitting real income and leading central banks to raise interest rates sooner than expected. “Today’s May number is not expected to be immune to the continued move higher in prices and further increases in the PCE deflator could well reignite market concerns about a less than transitory inflation environment,” said Michael Hewson, chief market analyst at CMC Markets UK.
The European Central Bank has reiterated that it was too soon to taper monetary policy in Europe, while on Thursday, the Bank of England struck a dovish tone to policy even as it acknowledged inflation would surpass its 2 per cent target.The European banking index rose 0.1 per cent and was set to end the week with gains of about 1.7 per cent as investors returned to economically sensitive sectors.