Slide in defence stocks knocks down Europe's STOXX 600 (updated)

Biomerieux SA

09/04/2024 10:18

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        * 
      BP gains on higher quarterly upstream energy output
forecast
    

        * 
      Fincantieri shines after Norwegian Cruise Line deal
    

        * 
      Italy cuts growth forecasts and says debt set to rise
    

  
 (Updates with closing prices)
    By Ankika Biswas, Johann M  Cherian and Ozan  Ergenay
       April 9 (Reuters) - A sell-off in defence stocks dragged
Europe's benchmark stock index lower on Tuesday, while investors
braced for this week's crucial U.S. inflation data and the
European Central Bank's monetary policy decision.
    The pan-European STOXX 600 index  .STOXX  closed 0.6% lower,
a day after notching its strongest session in nearly three
weeks. Benchmark indexes in Germany  .GDAXI , France  .FCHI  and
Italy  .FTMIB  lost between 0.9% and 1.3%.
    Defence-related stocks like Sweden's SAAB  SAABb.ST ,
Italy's Leonardo  LDOF.MI , Germany's Rheinmetall  RHMG.DE  and
France's Thales  TCFP.PA  were among the top laggards on the
STOXX 600, down between 4.9% and 9.8%. 
    A gauge of European aerospace and defence stocks  .SXPARO 
slumped 3.7%, logging its steepest one-day slide in over a year.
        
    Traders turned nervous
     about the sector's record-breaking run fuelled by rising
military spending after Russia's invasion of Ukraine in February
2022, with analysts noting potentially stretched valuations.
    Caution prevailed ahead of the U.S. inflation report on
Wednesday and the ECB's policy decision on Thursday which could
shed light on when major central banks might start cutting
interest rates this year.
    "Confidence in getting closer to rate cuts is rising in our
view, but still data dependent and insufficient for action,"
wrote analysts at Bank of America.
    "The 'meeting-by-meeting' approach means we shouldn't expect
guidance on the pace and depth of the cutting cycle."
    Euro zone bank shares  .SX7E  dropped 1% after an ECB survey
showed lenders lowered the bar on first-quarter mortgage
approvals for the first time in over two years, but demand for
credit kept falling as borrowing costs remained high in a
stagnant economy.
    Daimler Truck Group  DTGGe.DE  lost 4% after the company
reported a 13% drop in first-quarter sales.
        Biomerieux  BIOX.PA  jumped 8.6% after the French
diagnostics specialist published first-quarter organic growth
above consensus estimates, and presented a new five-year
strategic plan.
        KGHM  KGH.WA  advanced 8.7% following BoFA Securities'
double upgrade on the miner.
    BP  BP.L  rose 1.3% after the UK oil giant forecast a rise
in first-quarter upstream production of oil and gas as well as
low-carbon energy from the previous three months.
    Italian shipbuilder Fincantieri  FCT.MI  climbed 3.9% after
finalising a deal with Norwegian Cruise Line  NCLH.N  to supply
four new cruise ships.
    The basic resources sector  .SXPP  bucked the broader trend
to gain 1.4%, rising for the second consecutive day to its
highest level since the start of the year.
    Meanwhile, the Italian government cut its growth forecast
for this year and next and said public debt was set to rise. 

 (Reporting by Johann M Cherian, Ozan Ergenay and Ankika Biswas;
Editing by Sherry Jacob-Phillips, Shounak Dasgupta and Richard
Chang)
 ((johann.mcherian@thomsonreuters.com))