🧐 ProPicks AI October update is out now! See which stocks made the listPick Stocks with AI

European shares snap three-day winning streak on commodities' drag

Published 05/06/2024, 02:21 am
Updated 05/06/2024, 02:32 am
© Reuters. FILE PHOTO: A view shows the Milan stock exchange building in Milan, Italy, March 13, 2023. REUTERS/Claudia Greco/File Photo
UK100
-
XAU/USD
-
FCHI
-
DE40
-
BP
-
ALVG
-
HRGV
-
SPGI
-
GC
-
HG
-
STOXX
-

By Shristi Achar A and Shashwat Chauhan

(Reuters) -European shares slipped on Tuesday as falling commodity prices weighed on mining and energy stocks, though caution remained ahead of European Central Bank's interest rate decision later this week.

The continent-wide STOXX 600 closed 0.5% lower, snapping a three-day winning streak.

Energy stocks led losses with a 2.6% drop, hitting an over a two-month low, tracking a more than 1% fall in oil prices on scepticism about an OPEC+ decision to boost supply later this year into a global market where demand has already shown signs of weakness. [O/R]

"(Low crude prices), and the weaker economic data seen both sides of the (Atlantic) may provide some comfort for those on rate-setting committees hoping for an earlier cut to borrowing costs," said Derren Nathan, head of equity research at Hargreaves Lansdown (LON:HRGV).

Basic Resources, which houses Europe's biggest mining firms, dipped 2.3% amid declining prices of metals like gold and copper. [GOL/] [MET/L]

A risk-off mood also set in as market participants awaited the ECB's rate verdict on Thursday, where it is expected to ease borrowing costs by 25 basis points.

The recent uptick in the euro zone inflation data, however, has cast doubt on further monetary easing prospects this year.

Most bourses swung to losses on the continent, with France's CAC 40 down 0.8%, while London's FTSE 100 and Germany's DAX 40 shed 0.4% and 1%, respectively.

On the data front, the number of people out of work in Germany rose more than expected in May, while Swiss inflation was steady in May, raising market expectations the Swiss National Bank (SNB) will cut interest rates again later this month.

Wall Street also edged lower as latest labour market data exacerbated worries about growing weakness in the world's largest economy. [.N]

Among individual stocks, British oil giant BP (LON:BP) fell 3.8% after ratings agency S&P Global (NYSE:SPGI) revised the company's credit outlook lower.

© Reuters. FILE PHOTO: A view shows the Milan stock exchange building in Milan, Italy, March 13, 2023. REUTERS/Claudia Greco/File Photo

Allianz (ETR:ALVG) slid 3.3% after Citigroup downgraded the German insurer to "neutral" from "buy".

Mobile retailer and service provider Freenet gained 3.6% after UBS upgraded its rating to "buy" from "hold".

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.