During Monday’s session, the European stock market has made a comeback after a sharp loss of the last week, as the attention has been shifted to the interest rate cuts from the European Central Bank on this Thursday.
The STOXX 600 index of the European Union has ended its session at a high of 0.8 percent, which is recovered from its decline of 3.5 percent last week, which is also its worst performance since the month of March of the year 2023, as the investors turned to safer assets due to rising concerns over a slowdown in the global growth factor.
During Monday’s session, it was seen that the primary regional stocks have witnessed a rise of between 0.7 percent and 1 percent, while the French stocks have made the strongest comeback in comparison to other stocks. By these reports, we can conclude that the European stock market has experienced a moderate rate of growth while France’s stock market is the key player in it with the largest increase in its stock valuation.
There is an ongoing economic concern in the European region, as the Monday`s reports stated that the Euro Zone`s investor morale has come to a downstate for three consecutive months during the month of September, while it is also seen that the growth factor is recorded lowest since the month of January of 2024.
So, now all eyes are on the European Central Bank’s decision on rate cuts, which is yet to come on this Thursday. Additionally, the market is widely expecting that there will be a 25 basis points policy easing decision in the upcoming meeting, and during this situation, ECB President Christine Lagarde became the centre of attention for any indications regarding the additional rate cuts by the end of this year.
The analyst of the Danske Bank has stated that there is a slowdown in the labour market and economic activity after the June month`s meeting, so there should be a strengthening of the confidence that the disinflationary trend is now progressing as per the anticipation, mainly with the deceleration of the wage growth.
As the statement suggests, ECB President Christine Lagarde might give some hints regarding that the central bank is going to lower its tough monetary policy. But she also says that it is impossible to give a statement regarding when the interest rates will go down.
Basically, from the central bank meetings, we can anticipate a series of economic data to be revealed, which includes the price rise situation of countries like the United States of America, Spain, and France, while it is helpful to get the United Kingdom`s Gross Domestic Product`s data.
It is estimated that the United States inflation data will be kept in eyes for clues from the Federal Reserve on the rate cuts, which are set to meet later in the month, and there is also a chance of opting for the ease policy by the 25 to 50 basis points during the next few months.
The STOXX 600 sector-based index has indicated that there is a gain in other sectors except the real estate-based sectors, where it is seen that the real estate sector has witnessed a drop of 0.2 percent, which is a negative sign because during the last week this sector has gained around 4 percent, which indicated that the sector has experienced a sharp pause after its initial convention.
As the reports stated, the market, which is based on travel and leisure, has witnessed a rise of 2.1 percent, which is fuelled up by Entain`s 5.3 percent growth this year. While the gambling sector of the UK has also experienced a tremendous rise, the growth of this sector during the initial phase of 2024 is more than its assumptions, and this data is reported by a British-based gambling company.
Adidas AG has experienced a fall of 3 percent, which is impacted after Barclays declined their rating from overweight to equal weight, which is because to keep a neutral outlook on the company’s performance. On the other side, the entertainment-based company Ubisoft is also going through a loss of 7 percent. With this performance, this company has been tagged as the worst performer of the STOXX 600 index. Traders are indicating that the drop is a result of Cantor Fitzgerald`s demoting its rating of stocks to a neutral rating, which directly impacted lowering the confidence in the company’s future stance.
So, the Sofina has surged by around 12 percent after the accouchement of a second share buy program, which will be a great step to increase the investors’ confidence by dropping the total numbers of outstanding shares, which also leads to a price increase of the other remaining shares.
