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(Bloomberg) — European stocks snapped a three-day streak of gains on Monday amid light volumes with the UK market closed for a national holiday.
The Stoxx 600 Index was little changed as of 8:06 a.m. in London. Markets rose broadly last week as Federal Reserve Chair Jerome Powell saying the time had come for the central bank to cut its key policy rate. Technology and autos were biggest underperformers Monday, while real estate and energy gained.
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After a rough start to August, Europe’s benchmark index has rebounded as resilient economic data eased worries about a US recession. Still, some believe the market needs more than rate cuts to sustain the recent rally, given expectations for cuts were high already.
Read: Market Needs More Than Rate Cuts to Sustain Rally: Taking Stock
“This start of the week is placed under the threat of the ‘buy the rumor, sell the news’,” said Florian Ielpo, the head of macro research at Lombard Odier Asset Management. “Markets could be juggling a bit with the still deteriorating news-flow coming from the US and likely Europe.”
Later today, investors will be looking out for the Ifo survey for August, which may add to evidence that Germany is struggling to recover after GDP unexpectedly contracted in the second quarter, Bloomberg Economics said.
Over the weekend, the European Central Bank’s Chief Economist Philip Lane said the bank’s battle to return inflation to 2% isn’t won and interest rates must stay as high as necessary to achieve that goal.
Among single stocks, Siemens Healthineers agreed to buy part of a Novartis business that specializes in producing radioactive chemicals used for cancer scans, the Financial Times reported this weekend. Meanwhile, Swiss solar energy equipment maker Meyer Burger will halt the construction of a solar cell plant in Colorado, which is currently not financially viable, and will focus on module production in Arizona, according to a statement.
For more on equity markets:
- Market Needs More Than Rate Cuts to Sustain Rally: Taking Stock
- M&A Watch Europe: Novartis Unit; Vivendi’s Telecom Italia Stake
- US Stock Futures Little Changed
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—With assistance from Michael Msika.
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