European stocks decline after data on the slowdown in economic recovery

European stocks fell on Wednesday as investors became cautious after data indicated a slower-than-expected recovery for the euro-zone economy.

The European Stoxx 600 index fell 0.2 percent, with the industrial goods and services sector index declining 1.6 percent, while the utilities sector index rose 1.4 percent.

Despite an optimistic start to 2023, European stocks fell last month to their lowest level in March since 2020, as mixed economic data and recession fears overshadowed interest rate expectations in the region.

The eurozone’s recovery accelerated last month, but the recovery was uneven across sectors and countries, according to a survey showing that price pressures remained high in the region.

Eurozone government bond yields rose after European Central Bank Governing Council member Gabriel Makhlouf said on Tuesday that the eurozone will need stronger monetary policy action if it reaches a spiral of rising wages and prices.

Investors will be watching comments from ECB Chief Economist Philip Lane later on Wednesday for more clues about the bank’s tightening path.