European shares muted as investors await Fed minutes for policy outlook

FE Team | Published: November 21, 2023 22:47:50

European shares were subdued on Tuesday as declines in telecom and energy stocks offset gains in materials, while investors awaited minutes from the Federal Reserve's latest meeting to support bets that policymakers are done with interest rate hikes, reports Reuters.
The pan-European STOXX 600 was little changed by 0920 GMT.
Minutes from the Fed's latest policy meeting, where it held rates steady, are due at 1900 GMT.
"The theme permeating the market is the Fed's battle with inflation has been won and that despite what the likes of Powell and his colleagues might be saying about another hike still being on the table, market does not really believe that message anymore," said Stuart Cole, head macro economist at Equiti Capital.
Meanwhile, European Central Bank (ECB) officials have actively tried to shoot down growing bets of rate cuts amid data signalling a sustained fall in inflation and a likely recession.
ECB policymaker Francois Villeroy de Galhau argued rates will likely remain unchanged for the next few quarters, a day after Pablo Hernandez de Cos noted it was "premature" to talk about rate cuts. Euro zone sovereign bond investors were on hold on Tuesday.
Telecom stocks lost 0.4 per cent, while energy shed 0.5 per cent, tracking retreating oil futures ahead of an OPEC+ meeting.
Material stocks led sectoral gains, up 0.7 per cent, while retail stocks rose 0.6 per cent.
Among individual companies, Swiss hearing aid maker Sonova topped the STOXX 600, gaining 6.2 per cent after a smaller-than-feared warning on annual core profit.
Rheinmetall gained 3.8 per cent as the German arms company expects sales of 13 billion-14 billion euros ($14.18 billion to $15.27 billion) in revenue in 2026 and operating margins of more than 15 per cent.
Meanwhile, Monte dei Paschi di Siena lost 6.2 per cent after Italy sold a 25 per cent stake in the bailed-out bank.
Teamviewer dropped 8.7 per cent after Deutsche Bank on behalf of TigerLuxOne (Permira) launched a placement of 13 million shares in the German software company at a discount of about 8 per cent to Monday's closing price.
GEA Group slumped 5.4 per cent after a bookrunner said Groupe Bruxelles Lambert SA's unit Oliver Capital was selling 11.25 million shares in the German food-processing equipment maker.
CPI Property Group dropped 2.8 per cent following short-selling hedge fund Muddy Waters' short position on the credit of German-listed commercial landlord.
LVMH shed 1.2 per cent after UBS downgraded the French luxury giant to "neutral" from "buy". The sector was down 0.2 per cent.
Banco BPM lost 2.1 per cent after Deutsche Bank downgraded it to "hold" from "buy" and removed it from its EU banks top picks.