France leads Europe lower in mega week for central banks
French shares dragged European markets lower on Monday after two major TV groups fell on abandoning their merger plans, in a dour start to a week that could see a large interest rate hike by the Federal Reserve and a host of other central bank meetings. The pan-European STOXX 600 index traded 0.7% lower, while France's CAC 40 index dropped 1.3%.
French shares dragged European markets lower on Monday after two major TV groups fell on abandoning their merger plans, in a dour start to a week that could see a large interest rate hike by the Federal Reserve and a host of other central bank meetings.
The pan-European STOXX 600 index traded 0.7% lower, while France's CAC 40 index dropped 1.3%. Both indexes hit their lowest levels in two months. Shares in TF1 fell 3.2% and M6 declined 4.5% after merger plans between the French TV companies collapsed, as they noted antitrust requests had made the deal irrelevant.
The euro zone blue-chip stocks index shed 1%, with French luxury group LVMH and semiconductor maker ASML leading losses. Rate-sensitive technology stocks dropped 0.9% by 0804 GMT, ahead of the Federal Open Market Committee's (FOMC) interest rate decision on Wednesday. Most market participants expect the U.S. central bank to deliver a third straight 75 basis point hike.
"Investors seem to be worried about the upcoming central bank meetings," said Patrick Armstrong, chief investment officer at Plurimi Wealth. Most of the banks meeting this week - from Switzerland to South Africa - are expected to hike, with markets split on whether the Bank of England will go by 50 or 75 basis points.
"We've got the Fed meeting followed by Bank of England this week and the question of how much they will be hiking? So anyone who's thinking about buying equities is waiting until after the events," Armstrong said. European markets closed their worst weekly performance in three months on Friday on escalating recession worries amid aggressive central bank tightening.
London markets are shut on Monday for the state funeral of Queen Elizabeth. Euro zone government bond yields edged higher, with the benchmark German 10-year yield hovering near the mid-June highs hit last week.
In a bright spot, Volkswagen edged up 0.1% as it saw a valuation of up to 75 billion euros ($75.1 billion) for luxury sportscar maker Porsche, in what will be Germany's second-largest initial public offering (IPO) in history. Shares in Porsche Holding SE, Volkswagen's top shareholder, added 2.6%, topping Germany's DAX index.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)