Sept 9 (Askume) – European stocks rose on Monday, recovering from last week’s sharp decline, as focus turned to expectations of an interest rate cut by the European Central Bank on Thursday.
The pan-European STOXX 600 index (.STOXX) closed 0.8% higher after falling 3.5% in the previous week, its worst week since March 2023, as investors sought safer bets on concerns about slowing global economic growth hit assets.
On Monday, major regional stock markets rose between 0.7% and 1%, led by French shares (.FCHI) .
Euro zone investor sentiment fell for a third straight month in September to the lowest level since January, data showed on Monday , underlining persistent economic concerns in the bloc.
The European Central Bank ‘s interest rate decision on Thursday is at the center. The market widely expects a 25 basis point easing of policy and will be watching for any hints from European Central Bank President Christine Lagarde on the possibility of further interest rate cuts this year.
Analysts at Danske Bank said: “The slowdown in the labor market and economic activity since the June meeting should strengthen confidence that the deflation process is on track, especially given the slowdown in wage growth.”
“We expect Lagarde to confirm that a recovery is underway, but we do not expect her to commit to a specific timing for further rate cuts.”
In addition to the central bank meeting, there is plenty of economic data to watch, including inflation data from the United States, Germany, Spain and France, as well as UK gross domestic product data.
US inflation data will be closely watched for further cues on whether the Federal Reserve, which meets later this month, will ease policy by 25 basis points or 50 basis points.
All STOXX 600 sector indexes were in the green except real estate (.SX86P) , which fell 0.2% as the index took a breather after rising 4% last week.
Travel and leisure (.SXTP) outperformed other sectors, rising 2.1%, while British gaming group Entain (ENT.L) rose 5.3% after it said online revenue growth starting in the second half of 2024 was better than expected.
Adidas SA (ADSGN.DE) fell 3% after Barclays downgraded the stock to “equal weight” from “overweight .”
Ubisoft Entertainment (UBIP.PA) fell 7% and was at the bottom of the STOXX 600 index.
Meanwhile, Sofina (SOF.BR) rose nearly 12% after the company launched its second share buyback programme .
