European shares slip as traders scale back rate cut expectations

European shares opened lower on Tuesday as investors reined in expectations of interest rate cuts following recent comments from European Central Bank officials, while shares of Lindt & Spruengli jumped on upbeat results. The pan-European STOXX 600 moved 0.7% lower by 0810 GMT, declining for the second session in a row.

European shares opened lower on Tuesday as investors reined in expectations of interest rate cuts following recent comments from European Central Bank officials, while shares of Lindt & Spruengli jumped on upbeat results.

The pan-European STOXX 600 moved 0.7% lower by 0810 GMT, declining for the second session in a row. French central bank Governor Francois Villeroy de Galhau said in Davos the ECB cannot yet declare victory over inflation but its next move is likely to be an interest rate cut sometime this year, adding to the slew of comments from policymakers recently to push back rate cut expectations.

Traders now see a 25% chance of the first rate cut in March, down from over 30% in the previous week. Among major stock movers, Lindt & Spruengli jumped 4.2% after the Swiss chocolate maker said its 2023 sales growth beat market expectations, boosted by higher product prices.