© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, June 15, 2023. REUTERS/Staff
By Shreyashi Sanyal and Bansari Mayur Kamdar
(Reuters) -European shares fell on Monday, as investors awaited further stimulus measures from China to revive demand and eyed testimony from Federal Reserve Chair Jerome Powell this week for more cues on the U.S. central bank’s rate outlook.
The pan-European index shed 1.0%, while index also dropped 1.0% after closing at a record high in the previous session.
Trading was thin on Monday with U.S. markets shut for a public holiday.
Shares of lab supplies maker Sartorius plunged 15.7% after the company cut its 2023 revenue and margin forecasts on Friday.
Medical gear maker Getinge slumped 16.2% after saying it faced additional quality and supply chain problems that would hit the Swedish group’s second-quarter profit and also impact the business for the rest of 2023.
The focus remains on geopolitics after China and the United States agreed to stabilize their intense rivalry so it doesn’t veer into conflict but failed to produce any major breakthrough, while China’s cabinet met on Friday to discuss measures to spur growth in the economy, state media reported.
China is also widely expected to cut key lending benchmarks on Tuesday in the first such easing in 10 months, a Reuters survey showed, as authorities seek to shore up a slowing recovery in the world’s second-largest economy.
“There has been a lack of a more euphoric reaction in China-related markets to the latest easing measures,” strategists at Jefferies wrote in a client note.
“Given such market action and the relatively disappointing data, the question is whether more aggressive stimulus is coming.”
China-exposed luxury giant LVMH, which is Europe’s most valuable firm, fell 1.8%, while the basic resources index dropped 2.2% amid demand worries from the top metals consumer.
MTU Aero Engines (OTC:) climbed 4.2% after raising its earnings forecast for 2023, while the STOXX Europe aerospace & defence index added 0.4%.
Airbus shares edged up on announcing the biggest plane deal in history, with an order for 500 narrow-body jets from Indian budget carrier IndiGo.
The STOXX 600 is coming off its best performance in over two months, as investors await testimony from Fed Chair Powell on Wednesday and Thursday for further cues on the monetary policy outlook for the world’s largest economy.
Meanwhile, rate hikes are also expected in Britain, Norway and Switzerland this week.
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