European stocks maintain stability, energy sector sees decline
Date
11/21/2023 5:04:12 AM
(MENAFN) European Stocks maintained stability on Monday, building on a robust weekly performance fueled by growing expectations of interest rate cuts. However, gains in the energy sector were offset by a decline in health care stocks. The European STOXX 600 index showed little change by 0810 GMT, having surged approximately three percent in the previous week. The index is poised to secure its first monthly gain since August.
Investor optimism for a substantial 100 basis point interest rate cut in 2024, with the first cut potentially happening by April, was dampened by European Central bank officials. They emphasized that inflation remains high, and the economy exhibits considerable strength, dispelling some of the buoyancy in the market.
Energy sector shares experienced a 0.7 percent rise, contributing to the overall stability. In contrast, health care sector shares declined by 0.6 percent, with German pharmaceutical and pesticide company Bayer witnessing a notable 12 percent drop. This decline followed the cancellation of a significant trial in the final stages of a new anti-clotting drug, pushing Bayer shares to their lowest level in 12 years. The German DAX index also dipped by 0.1 percent.
The British equipment rental company Ashtead Group faced a substantial setback, with shares plummeting by 13.5 percent. This decline was attributed to the company's announcement of anticipated annual profits below expectations and a depreciation cost exceeding two billion dollars for the year. The market response reflects the sensitivity to corporate performance and outlook, contributing to the nuanced dynamics of European stocks despite the overall stability observed.
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