European stocks retreated from near record-high levels, as investors assessed the outlook for interest rates after US Federal Reserve policymakers dialed back their expectations for cuts this year.
The Stoxx Europe 600 Index slipped 0.5% by 9:20 a.m. in London, after rallying by the most in five weeks on Wednesday as data showed cooling US inflation.
The autos and chemical sectors led declines Thursday. Among individual stocks, Wise Plc sank after reporting preliminary full-year results. Novo Nordisk A/S was subdued after a newspaper report said Denmark was telling doctors that the company’s weight-loss drug Wegovy should be used to a lesser extent.
European stocks have made only modest gains in June, even as investors bet on central bank policy easing this year. The European Central Bank cut rates this month, although the Fed signaled on Wednesday that it expects to lower borrowing costs only once in 2024 instead of the three reductions penciled in previously.
That hawkish indication is weighing on investor sentiment Thursday, Liberum strategist Joachim Klement said. “However, investors should not forget that inflation in Europe and the UK is lower than in the US. This should give European market the necessary support to continue their 2024 rally and overcome the soft spot of recent weeks,” he said.
The UK’s FTSE 100 edged lower as investors awaited the opposition Labour Party’s manifesto ahead of next month’s general election, with polls showing the party remains on track to come into power.
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With assistance from Michael Msika.
This article was generated from an automated news agency feed without modifications to text.
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Published: 13 Jun 2024, 11:09 PM IST