European Stocks Drop by Most in Two Months on Rates, Trade Woes
European stocks suffered their biggest decline in two months, hit by the possibility of a shallower-than-expected monetary easing cycle and renewed concerns over a trade spat with the US.
The Stoxx 600 Index fell 0.9% by the close, the biggest one-day decline since Dec. 19. Traders cut bets on further European Central Bank monetary easing after Executive Board member Isabel Schnabel said the time to pause or halt interest rate cuts is getting closer.
Royal Philips NV sank 11% as it expects lower demand in China to stymie growth for the Dutch medical equipment maker this year. Glencore Plc fell 7.3% after the world’s biggest commodity trader posted a slide in full-year profit. Construction and retail stocks were the biggest decliners, while utilities and personal care outperformed.
Trade tensions are also in focus, as US President Donald Trump said he would likely impose tariffs on automobile, semiconductor and pharmaceutical imports of around 25%.
Mark Taylor, director of sales trading at Panmure Liberum, said “a number of small incremental negatives” were weighing on sentiment in Europe, including the hawkish ECB comments and developments on Ukraine.
European stocks have been sensitive to news around potential tariffs as well as negotiations to end the war in Ukraine. Secretary of State Marco Rubio told European allies that the US will keep sanctions on Russia in place at least until a deal is reached to end the conflict in Ukraine.
Source : Bloomberg
