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European shares tepid as financials offset gains in energy stocks; Holcim shines

News Team

European equities started the week on a subdued note, after hitting two-year highs in the previous session, as losses in financial stocks partially outweighed strong gains in the energy sector.

The pan-European STOXX 600 index was flat on Monday at 483.86 points, as of 0940 GMT. On Friday, the benchmark index hit its highest in two years and clocked the best week in three months.

Oil and gas stocks added 1.3%, tracking earlier gains in crude prices after a drone attack on U.S. forces in Jordan added to worries over supply disruption in the Middle East.

“We’re in a period right now where demand for oil has been fading over the past year or so. Something (has to happen) on the supply side to affect the price and we’ve seen that,” Michael Field, European market strategist at Morningstar, said.

Countering gains, financials lost 0.5%, bogged down by a 4.4% fall in Schroders (LON: SDR) after Exane BNP Paribas (OTC: BNPQY) downgraded the UK fund manager’s shares and Jefferies raised concerns about the company’s prices-earnings premium.

Shares of Ryanair, Europe’s largest airline by passenger numbers, dropped 2.9% after the carrier trimmed its profit forecast for the year ended March. The travel and leisure index fell 0.5%.

Investor focus will now be on the U.S. Federal Reserve’s interest rate decision later this week.

The European Central Bank’s Vice-President Luis de Guindos said they will cut interest rates sooner or later given recent encouraging inflation evolution in the eurozone.

Holcim (SIX: HOLN) jumped 3.6%, and was among the top performers on the benchmark index, after the Swiss building materials giant said it will spin off its North American operations.

Philips fell 5.6% after the health technology firm agreed on the terms of a settlement with the U.S. Food and Drug Administration over a large-scale recall of ventilators.

Bayer (OTC: BAYRY) lost 5.4% after the German company was ordered to pay $2.25 billion to a Pennsylvania man who said he developed cancer from exposure to the company’s Roundup weedkiller. The stock dropped to the bottom of Germany’s DAX 40, with the index down 0.5%.

Meanwhile, Goldman Sachs lowered its 2024 earnings growth forecast for European STOXX 600 companies to 3% from 7%, citing headwinds from lower oil prices and inflation.

Source: https://www.investing.com/news/stock-market-news/european-shares-tepid-as-travel-stocks-counter-gains-in-energy-3285483