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European shares slipped on Monday, marking further losses in the wake of recent setbacks. The STOXX 600 index dropped 0.2% by 0909 GMT, extending concerns from a four-week losing streak. This decline, the longest in 2.5 years, was fueled by disappointing earnings, rising Treasury yields, and uncertainty over U.S. President-elect Donald Trump’s economic policies.
Sector Performance and Market Movers
Technology and real estate stocks weighed heavily on the STOXX 600. The tech sector fell 0.6% as investors anticipated Nvidia’s quarterly results on Wednesday, a key indicator for the artificial intelligence market. Meanwhile, real estate stocks led the losses across major sectors.
In individual stock performance, Britain’s Melrose Industries surged 8.6% after reporting a 7% revenue increase for the four months ending October 31, benefiting its GKN Aerospace division. Dutch tech investor Prosus gained 1.3% following a favorable trading update. On the downside, Spanish drugmaker Grifols dropped 2.8% amid reports that Canadian fund Brookfield might bid approximately €7 billion for the company.
Focus on ECB and Economic Signals
Market participants are closely monitoring European Central Bank (ECB) policymakers for insights on future interest rate adjustments. ECB chief economist Philip Lane and President Christine Lagarde are scheduled to deliver speeches later on Monday, with traders keen on any signals ahead of the euro zone’s flash Purchasing Managers’ Index (PMI) data expected on Friday.
ECB Vice President Luis de Guindos expressed concerns over the risk posed by global trade tensions to the fragile euro zone economy. At the same time, Joachim Nagel highlighted the potential for tariffs proposed by Trump to disrupt international trade, though he suggested they might only have a “minor impact” on inflation.
Traders are factoring in a 72% probability of a 25 basis point rate cut by the ECB in December, with expectations of a cumulative 142 basis points of rate reductions by the end of the next year.
