European shares experienced a slight decline on Monday, following last week’s sharp gains, as investors prepared for a week filled with central bank meetings worldwide, including interest rate decisions from Norway, Sweden, Switzerland, the UK, and the United States.
The pan-European STOXX 600 fell by 0.4% by 0805 GMT, with healthcare and rate-sensitive technology stocks exerting downward pressure on the index.
This week, global central banks will take center stage, following the European Central Bank’s (ECB) announcement of an end to rate hikes last week. The Bank of England (BoE) is expected to raise rates for the 15th time later in the week, while the Federal Reserve seems poised for a hawkish pause.
Goldman Sachs lowered its forecast for the BoE’s terminal rate by 25 basis points to 5.5%.
Markets remained cautious as euro zone bond yields edged higher following hawkish remarks from some ECB officials after their rate decision.
ECB Governing Council member Yannis Stournaras said governments must do their part in reining in consumer prices after borrowing costs reached a level that may well be their peak, Bloomberg News reported on Sunday.
Nordic Semiconductor ASA saw a 13.2% drop, making it the worst-performing stock on the STOXX 600, after cutting its revenue guidance for the third quarter. Peer Fingerprint Cards fell 5.8%.
Societe Generale (OTC:SCGLY) declined by 6.3% after France’s third-largest bank announced that it expected little to no growth in annual sales over the coming years in a much-anticipated strategic plan from its new CEO.
Lonza’s chief executive, Pierre-Alain Ruffieux, will leave the Swiss company by mutual agreement at the end of the month, causing shares of the contract drug manufacturer to fall by 9.6% due to concerns about the group’s medium-term profit prospects.
Martin Sorrell’s advertising group, S4 Capital, slumped by 22% after cutting its annual forecast for the second time in as many months, citing recession fears that were making clients cautious.