Europe’s STOXX 600 Falls as China Stimulus Boost Wanes; Focus on US CPI.
European shares snapped an eight-session winning run on Tuesday, hurt by losses in miners, as the rally sparked by China stimulus pledges tapered off after its weak trade data, while the focus is now on U.S. inflation data.
The pan-European STOXX 600 index was down 0.3%, with the UK’s benchmark FTSE 100, down 0.5%, falling the most among European peers.
The UK’s Ashtead fell nearly 10% after the equipment rental firm said it would shift its primary listing to the U.S., its biggest market, from London, and said it expects annual profit to come in below its previous expectations.
Basic resources, down 1.1%, dragged the benchmark lower and led the losses among sectors after China’s trade data pointed to weakening demand, while healthcare and autos were in the green, up 0.4% and 0.2%, respectively.
Stocks of luxury companies that earn substantial revenue from China, such as LVMH and Kering, lost 1.9% and 1.3% respectively to push France’s CAC 40 index lower by 0.6%.
Germany’s benchmark DAX index was down 0.1% after domestic inflation remained flat at 2.4% in November, confirming preliminary data.
Investors will now shift their focus to U.S. inflation data, due on Wednesday, that may cement bets for another interest rate cut on Dec. 18.
Money markets currently see an 85% chance of a 25-basis-point interest rate cut by the U.S. central bank on Dec. 18, with a total easing of 87 bps factored in for the next one year, according to LSEG interest rate probabilities.
On the radar will also be comments from European Central Bank (ECB) Vice President Luis de Guindos later in the day ahead of the ECB meeting on Thursday.
“We expect the ECB to continue to deliver 25 bps cuts at every meeting to April next year, taking the deposit rate to 2.25%, before cutting again later in the year to reach a terminal rate of 2.0%,” said Felix Feather, an economist at abrdn.
Among other movers, Delivery Hero dropped 8.6% to the bottom of the STOXX 600 after it listed its Middle East subsidiary, Talabat, on the Dubai Stock Exchange in the largest global technology initial public offer in 2024.
Allianz slid 0.7% after one of Europe’s biggest insurers raised its three-year financial targets after outperforming its key goals for this year.
D’leteren Group jumped over 24%, on track to log its best day since 1989.