French stocks lead Europe's STOXX 600 lower on growth forecast downgrade

France's benchmark index lost 0.4%, easing from Friday's record high, after the government trimmed the economy's 2024 gross domestic product growth forecast to 1% from 1.4%, hurt by the ongoing war in Ukraine and Gaza and a slowdown in top trading partners Germany and China. "The fact that two core economies (France and Germany) in the eurozone are under difficulty is not particularly good news," said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.

European stocks slipped on Monday, with French stocks taking a hit after the government cut its annual economic growth forecast, while shares of car parts maker Forvia rose following an upbeat outlook and on plans to trim its workforce.

The continent-wide STOXX 600 index was down 0.1%, while the euro zone blue-chip STOXX 50E index lost 0.3% by 0948 GMT. France's benchmark index lost 0.4%, easing from Friday's record high, after the government trimmed the economy's 2024 gross domestic product growth forecast to 1% from 1.4%, hurt by the ongoing war in Ukraine and Gaza and a slowdown in top trading partners Germany and China.

"The fact that two core economies (France and Germany) in the eurozone are under difficulty is not particularly good news," said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank. "But, with growth outlooks softening, it means that the ECB (European Central Bank) will at some point have to soften its hand to support the economy."

The main STOXX index had notched weekly gains for the past four and closed at a fresh two-year high on Friday, driven by optimism around a robust corporate earnings season and hopes of imminent rate cuts by the ECB. As borrowing costs remain high, fears of a slowdown in the region's top economies - Germany and France - loom ahead of the former's fourth-quarter GDP figures, due later in the week.

Germany's DAX index also lost 0.3%, not offset by a 3.3% gain in Rheinmetall, as the top artillery producer plans to open an ammunition factory in Ukraine as part of a joint venture. Juventus fell 2% after the Italian sports club said its net loss widened in the first half.

Forvia climbed 3.2% after the world's seventh-largest automotive supplier forecast better-than-expected 2024 sales and said it would slash 13% of its European workforce over the next five years. The healthcare sector limited losses on the STOXX with its 0.6% rise, boosted by a 3.5% advance in AstraZeneca after a combination of the pharmaceutical giant's cancer drug Tagrisso with chemotherapy to treat a type of lung cancer was approved by the U.S. Food and Drug Administration.

Keeping the UK mid-cap index near the flat mark, Currys soared 34.9% after Chinese e-commerce group JD.com said it is evaluating a possible offer for the British electricals retailer, setting the stage for a bidding war, after the firm rejected a rival deal earlier. Trade volumes are expected to be thinned with U.S. markets shut on account of a public holiday.