Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

European shares slip as cenbank meetings loom, Croda falls on profit warning

Published 06/09/2023, 03:31 AM
Updated 06/09/2023, 12:22 PM
© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, June 7, 2023.    REUTERS/Staff
STOXX
-
NHYDY
-

By Shreyashi Sanyal and Bansari Mayur Kamdar

(Reuters) -European shares slipped on Friday, rounding off a lacklustre week that saw investors step to the sidelines ahead of crucial updates from the U.S. Fed and European Central Bank (ECB), while Croda slid on a tepid profit outlook.

The pan-European STOXX 600 index closed 0.2% down and ended the week 0.5% lower.

Investors feared that the Fed could opt for a hawkish stance in its meeting next week, while the ECB is expected to continue to tighten monetary policy.

Money markets now see a 73% chance that the Fed will skip raising interest rates in its June meeting but will resume rate hiking in July. For the ECB, traders see about a 98% chance of a 25-basis-point rate hike next week.

"Our view on the Fed is that they want to pause... We do however, expect the Fed to keep the door open for another hike in July," Mohit Kumar, a strategist at Jefferies, said.

"ECB is in a slightly different position as we do not believe that it is in the 'sufficiently restrictive territory' yet. We expect a rate hike in June followed by another in July and that should mark the end of the current rate hiking cycle."

Weakness in the rate-sensitive insurance sector and banks weighed on the STOXX 600, with the sectors down 0.5% and 0.4%, respectively.

Shares of Croda International tumbled 12.5% to the bottom of STOXX 600 after the British chemicals company forecast its annual pre-tax earnings to come in below expectations.

The broader European chemicals index fell 2.0%, leading sectoral declines. Chemicals also fell the most among major European sectors for the week, down 3%.

Orsted (OTC:DOGEF) gained 4.0%, lifting the utilities sector, as Goldman Sachs (NYSE:GS) raised its price target on the renewable energy group.

© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, June 7, 2023.    REUTERS/Staff

Vivendi (OTC:VIVHY) shed 2.4% after Euronext said it will be excluded from France's CAC 40.

French shoppers should pay less for their food from next month, Finance Minister Bruno Le Maire said on Friday, after he secured a pledge from 75 top food companies including Unilever (NYSE:UL) to cut prices on hundreds of products.

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.