Investors speculate about date of rate move by the Fed
European stocks headed for their longest run without gains in two months, as investors speculated on whether the Federal Reserve will raise interest rate increase this year, earlier than expected.
By mid-afternoon in Dublin, the ISEQ Overall Index was up 0.1pc or 6.23 points to 6,041.28.
The mid-afternoon leaders on the Dublin index included drinks group C&C, which rose 1.6pc to €3.83, while Paddy Power Betfair increased 0.8pc to €112.
On the other side of the board, the laggards included packaging giant Smurfit Kappa, which slipped 1.9pc to €20.93, while speciality baker Aryzta dropped 2.1pc to €33.80.
Elsewhere, the Stoxx Europe 600 Index slipped 0.8pc to 340.67 by mid-afternoon in London, with miners leading declines amid weak commodity prices.
Stocks fell in thin trading on Tuesday as a stronger euro weighed on exporters and investors assessed New York Fed President William Dudley's warning that they are underestimating the likelihood of higher borrowing costs, and a rate increase could come as soon as September.
The volume of Stoxx 600 shares traded yesterday was 28pc lower than the 30-day average.
"A pull-back is following through in European stocks yesterday after the Fed raised the possibility of a September rate hike - it seems like expectations had become too muted," said William Hobbs, the head of investment strategy at the wealth-management unit of Barclays in London.
"There's some profit taking setting in as commodities soften a little bit."
Atlanta Fed chief Dennis Lockhart backed up Dudley's stance, saying he's confident growth is accelerating enough for at least one hike in 2016. Traders have brought forward their bets for a rate increase, with December now the first month with at least even odds of a move.
Investors are evaluating a recent rally that helped European shares erase their post-Brexit losses and propelled UK and German benchmarks into bull markets.
Confidence that central banks will continue to support growth, and some better than expected corporate results drove a rebound after a slump following Britain's vote to leave the European Union. Still, the Stoxx 600 yesterday dropped below its 200-day moving average, a level that has proved a hurdle after past rallies. The benchmark is down 6.9pc for the year.
Carlsberg slid 5.2pc after the Danish brewer reported first-half profit that missed analysts' estimates as the weakness of Russia's ruble eroded earnings.