Updated December 21st, 2023 at 17:25 IST
European shares witness decline
The real estate and automobile stocks lead losses.
European markets faced a downturn on Thursday, influenced by significant losses in real estate and automobile stocks. This drop interrupted the recent surge in global stocks, leaving investors anticipating key U.S. economic growth data later in the day.
The pan-European STOXX 600 index slid by 0.3 per cent as of 0935 GMT, potentially ending a two-day winning streak, aligning with declines seen in other regional markets.
The automobile and parts sector suffered the most, experiencing a 1 per cent decline, while real estate stocks, sensitive to interest rate changes, slipped by 0.8 per cent.
However, amidst the downturn, basic resource shares managed to buck the trend, registering a 0.3 per cent gain, buoyed by an uptick in gold prices.
Early trading saw Germany's DAX index down by 0.4 per cent. The sentiment among German retailers waned in December, as indicated by a Thursday survey.
This decline in European stocks followed a similar fall in Wall Street's main indexes the day before. This halt in the global share rally was instigated by speculations regarding potential interest rate cuts by the Federal Reserve as early as March.
Analysts at Deutsche Bank noted, "There's a clear divergence between the Fed's own signals and market pricing, which has remained even as several officials have actively pushed back on the reaction since the Federal Open Market Committee last week."
The European Central Bank's Vice President, Luis de Guindos, mentioned on Thursday that it was premature to discuss interest rate cuts. Investors are keenly observing remarks from the ECB's chief economist, Philip Lane, scheduled around 1600 GMT, to discern the trajectory of interest rates in the euro zone.
Later in the day, the final assessments for US third-quarter gross domestic product and the weekly jobless claims report will be crucial, providing further insights into the Fed's stance on rates.
In corporate updates, Swisscom shares dipped by 0.6 per cent following reports indicating the telecom company's consideration of a bid for Vodafone's Italian business early next year. The broader telecommunications index also witnessed a 0.3 per cent decline.
Commerzbank led gains on the STOXX 600, rising by 2.7 per cent after securing ECB approval for a share buyback of up to 600 million euros ($656.88 million).
On the downside, shares in drugmaker Argenx fell by 2.9 per cent, extending a decline of over 25 per cent from the previous session when the company reported the failure of its autoimmune drug in a study.
Dutch medical device maker Philips experienced a 1.5 per cent drop after the US FDA classified the recall of its medical imaging devices as most serious.
(With Reuters inputs)
Published December 21st, 2023 at 17:25 IST