European shares fell on Monday, following declines on Wall Street last week, as investors gear up for Federal Reserve’s rates decision.
The Stoxx 600 Index edged 0.4% lower as of 8:12 a.m. in London, with tech and consumer products stocks dropping the most. Societe Generale SA declined after the bank’s new strategic plan disappointed analysts, while Nordic Semiconductor slumped after the chipmaker reduced quarterly revenue and margin forecasts.
The main regional benchmark dips after recording the biggest weekly advance in two months. Beyond the nervousness about the Fed this week, gains are also being hit by renewed fears about the health of the Chinese property sector, which dented Chinese stocks in Hong Kong.
April LaRusse, head of investment specialists at Insight Investment said “the Fed or any other central bank this week will leave as much wiggle room as possible in terms of forward guidance.”
“In terms of cuts next year, we’re thinking why rush unless economy is actually contracting there would be no reason to start cutting until the second half of next year,” she added, in a Bloomberg TV interview. She expects growth “to stagnate and then maybe you get the odd quarter of contraction but it’s not going to be a 2008-sort of slowdown or anything like that.”
Meanwhile, European Central Bank’s Governing Council member Martins Kazaks says betting that the bank cutting interest rates in the first half of next year would be a mistake.
For more on equity markets:
- Energy Shares Look Cheap Given Oil’s Recent Surge: Taking Stock
- M&A Watch Europe: Bouygues, Colas, Thales, Mondi, Schott Pharma
- US Stock Futures Rise
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--With assistance from Michael Msika.
