📈 69% of S&P 500 stocks beating the index - a historic record! Pick the best ones with AI.See top stocks

November rally in European stocks stalls after comments from ECB officials

Published 11/28/2023, 03:47 AM
Updated 11/28/2023, 12:13 PM
© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, November 21, 2023. REUTERS/Staff/File Photo
PRTP
-
STOXX
-

By Sruthi Shankar and Bansari Mayur Kamdar

(Reuters) -European shares fell for a second session on Tuesday, stalling November's strong run of gains, after comments by European Central Bank policymakers dampened expectations of interest rate cuts next year.

The pan-European STOXX 600 index eased 0.3%, with market heavyweights such as Novo Nordisk (NYSE:NVO) and LVMH falling 3.1% and 1.8%, respectively.

The healthcare sector slid 1.4%, with Belgian pharmaceutical firm Argenx tumbling 10.1% to the bottom of the STOXX 600 after an advance study of its treatment for bleeding disorder failed to meet primary and secondary endpoints.

The benchmark was still on course for its best monthly performance since January, on expectations that major central banks including the Federal Reserve and the ECB were done raising interest rates and could begin easing policy next year.

Bundesbank chief Joachim Nagel said on Tuesday the ECB may need to raise interest rates again if the inflation outlook worsened, and that the bank should not rush to ease policy too quickly after the steepest set of rates hikes on record.

ECB President Christine Lagarde said on Monday the bank's fight to contain price growth was not yet done.

"Speeches from central bank policymakers this week are aimed at curbing enthusiasm that rate cuts could come sooner rather than later," said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

"Jerome Powell, chair of the Fed, is also highly likely to sing from the same song sheet when he speaks on Friday."

Investors will focus on a slew of economic data this week including euro zone inflation numbers on Thursday and U.S. Personal Consumption Expenditures index - the Fed's preferred inflation gauge - for clues on the monetary policy path.

Traders are currently pricing in a 45% chance of a first 25 bps rate cut by the ECB in April, down from about a 90% chance two weeks ago.

Meanwhile, a survey showed German consumer sentiment improved slightly heading into the Christmas month but remained at a very low level with no signs of sustainable recovery in Europe's biggest economy.

Julius Baer slid 4.7% as Morgan Stanley downgraded the Swiss bank to "underweight" from "equal-weight," concerned by the quality of some of its assets.

© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, November 21, 2023. REUTERS/Staff/File Photo

Ubisoft fell 9.0% after the French video game producer announced a placement of convertible or exchangeable bonds into shares.

RWE will raise investment in green energy technologies to 55 billion euros ($60 billion) over the next seven years, Germany's biggest power producer said, lifting its shares by 3.1%.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.