European stocks snapped a three-day streak of gains on Monday amid light volumes with the UK market closed for a national holiday.
The Stoxx 600 Index was little changed at the close in London. Markets rose broadly last week as Federal Reserve Chair Jerome Powell said the time had come for the central bank to cut interest rates. Technology and insurers were biggest underperformers Monday, while real estate gained. Energy shares also advanced with oil as investors monitored rising tensions in the Middle East.
After a rough start to August, Europe’s benchmark index has rebounded as resilient economic data eased worries about a US recession. Still, some believe the market needs more than rate cuts to sustain the recent rally, given expectations for cuts were high already.
Read: Market Needs More Than Rate Cuts to Sustain Rally: Taking Stock
“This start of the week is placed under the threat of the ‘buy the rumor, sell the news’,” said Florian Ielpo, the head of macro research at Lombard Odier Asset Management. “Markets could be juggling a bit with the still deteriorating news-flow coming from the US and likely Europe.”
The German Ifo survey today added to evidence that Europe’s largest economy is struggling to recover, according to Bloomberg Economics. Still, the business expectations component deteriorated by far less than estimated, supporting the case that the services sector will eventually gain momentum from a boost in real incomes.
Over the weekend, the European Central Bank’s Chief Economist Philip Lane said the bank’s battle to return inflation to 2% isn’t won and interest rates must stay as high as necessary to achieve that goal.
Among companies in focus, Siemens Healthineers agreed to buy part of a Novartis business that specializes in producing radioactive chemicals used for cancer scans, the Financial Times reported this weekend. Meanwhile, Swiss solar energy equipment maker Meyer Burger slumped after it announced it will halt the construction of a solar cell plant in Colorado, which is currently not financially viable, and will focus on module production in Arizona.
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With assistance from Michael Msika.
This article was generated from an automated news agency feed without modifications to text.