European stocks dragged down by healthcare; German inflation data in focus (updated)
02/04/2024 10:33
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German inflation eases to almost 3-year low
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SSAB's costly mill investment sends shares down
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Ionos rises after winning government contract
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STOXX 600 down 0.8%
(Updates with closing prices)
By Johann M Cherian and Ankika Biswas
April 2 (Reuters) - European stocks made a downbeat
start to the second quarter, pressured by healthcare shares,
while investors parsed inflation data from the continent's
largest economy Germany for clues on the timing of European
Central Bank interest rate cuts.
The continent-wide STOXX 600 .STOXX closed 0.8% lower on
Tuesday, slipping to a one-week low after hitting an all-time
intraday high, with investors returning after an extended
weekend and the Easter holiday.
Speculation about imminent interest rate cuts has convinced
investors to buy into risky assets in recent weeks, even as the
benchmark index trades close to record highs after notching its
second straight quarter of gains.
But equities fell back on Tuesday, also weighed down by
rising euro zone bond yields.
Preliminary data showed German inflation eased slightly more
than expected in March, helped by lower energy prices. That came
a day ahead of broader euro zone inflation data.
Commerzbank Research analysts said they expected March to be
a trough in German inflation and that it was set to rise again
in the coming months, with the core rate stabilising above the
ECB's 2% target.
Among major sectors, healthcare .SXDP lost 1.6% after
recent gains. Siegfried Holding SFZN.S dropped 5.4% as the
Swiss pharmaceutical company's CEO Wolfgang Wienand is set to
step down to join Lonza.
Retail .SXRP , real estate .SX86P , and travel and leisure
.SXTP also dropped over 2% each.
On the flip side, energy stocks .SXEP gained 2.5%, hitting
a more than five-month high, as oil prices jumped on fresh
threats from Ukrainian attacks on Russian energy facilities and
escalating conflict in the Middle East.
Norway's oil-heavy benchmark index .OBX also rose 1.5%.
Equinor EQNR.OL gained 4% after Bernstein initiated coverage
of the Norwegian stock with an "outperform" rating.
Basic resources .SXPP also climbed 1.8% to hit a more than
two-month high, tracking strong metal prices.
As for individual movers, SSAB SSABa.ST lost 6.1% on the
Swedish steelmaker's plans to invest 4.5 billion euros ($4.8
billion) in building a fossil-free mini-mill in Lulea, Sweden,
more than previously expected.
Superdry SDRY.L plunged 55% to a record low after the
British fashion retailer's CEO and top shareholder Julian
Dunkerton said he would not be making an offer for the company.
Ionos Group IOSn.DE surged 11.5% after the web hosting and
cloud company won a contract from the German federal
administration.
Soltec SOLPW.MC lost 7.4% after the Spanish solar
equipment manufacturer restated its 2023 results and reported a
net loss of 23.4 million euros.
($1 = 0.9290 euros)
(Reporting by Johann M Cherian and Ankika Biswas in Bengaluru;
Editing by Shounak Dasgupta and Mark Potter)
((johann.mcherian@thomsonreuters.com))