European stocks fall on ECB policy decision By Reuters
Johann M Cherian, Ozan Ergenay
(Reuters) – European stocks fell on Thursday as investors avoided big bets ahead of ECB President Christine Lagarde’s comments on the European Central Bank’s monetary policy decision and the prospect of interest rate cuts.
The pan-European index was down 0.3% as of 0906 GMT. Telecommunications led the sectoral declines, with Deutsche Telekom (OTC:) down 5.5% as the company traded ex-dividend.
All eyes will be on the ECB’s decision, scheduled for 12:15 GMT. The central bank is likely to keep interest rates unchanged, but the focus will be on easing price pressures and hints that a rate cut could come in June given economic weakness.
Interest rate sensitive industries such as real estate and banking fell 0.6% and 1.0%, respectively.
“The ECB has clearly signaled that it wants to see more evidence of moderating wage growth before it is ready to cut interest rates,” said Joost van Leenders, chief investment strategist at Van Lanschot Kempen.
After a sluggish week overall, the STOXX 600 fell in the previous session after a hot inflation report in the US sparked concerns about the timeline for the Fed’s first rate cut and raised expectations that the ECB could cut rates before the US. It hit a one-month low. match.
Shares in Societe Generale (OTC:), which topped France’s blue-chip index, fell 2.5 percent after the lender said it had agreed to sell its professional equipment finance business to rival BPCE for 1.1 billion euros ($1.18 billion). % rose.
Limiting the decline, the oil and gas sector rose 1.2%, tracking higher crude prices.
Idorsia postponed reporting its 2023 and first quarter results, sending the Swiss biotech company’s shares down 19.2%.
AstraZeneca (NASDAQ:) rose 1.5% and was the biggest gainer in the UK after the drugmaker said it plans to increase its annual dividend by 7% in 2024.
Volvo (OTC:) fell 3.4% after brokerage Citigroup downgraded the stock to “neutral” from “buy”.
(This story has been corrected in paragraph 11 to correct the company name and equipment code to Volvo.)
