(Reuters) – European stocks fell to a nearly two-month low on Monday and the German benchmark fell 2% as investors feared major central banks would start giving indications of cutting their pandemic-era stimulus programs at various meetings this week.
The pan-European STOXX 600 index was down 1.5% as of 07:45 GMT, with mining stocks plunging 3.2% on lower commodity prices. [O/R] [MET/L]
Asian stocks also slipped following a scorching session for China Evergrande, the world’s most leveraged real estate developer. [MKTS/GLOB]
The European benchmark STOXX 600 has now fallen for three straight weeks amid concerns over slowing global growth, surging inflation, still high COVID-19 cases and the fallout from more regulation. strict Chinese enterprises.
The US Federal Reserve’s policy meeting is at the center of discussions on Tuesday and Wednesday, where the central bank is expected to lay the groundwork for a tapering. A total of 16 central banks are expected to hold meetings this week, including in the UK, Norway, Switzerland and Japan.
“Granted, the (Fed) is set by default to keep the QE (quantitative easing) taps open during this week’s (meeting), given the considerable job disappointment in August as well as the spotting of indicators. weak economies, “said Vishnu Varathan, director of economics and strategy at Mizuho.
âBut that only delays the taper. How much is the question.
German stocks fell 1.8% to their lowest since late July, with data showing a larger-than-expected jump in producer prices last month.
In its biggest overhaul in its history, the blue-chip German index began trading on Monday with an increase in the number of constituents from 30 to 40.
Europe’s fear gauge has hit a four-month high.
Luxury stocks exposed to China such as LVMH, Kering, Hermes and Richemont fell between 2.5% and 3.7%, extending the steep losses of last week.
Daimler AG lost 2.3% as a report cited the head of its trucks division, the world’s largest, as saying the unit has seen the supply of crucial chips tighten further in recent weeks.
Lufthansa, on the other hand, reversed early declines to jump 3.1% after saying it planned to raise 2.14 billion euros ($ 2.51 billion) to repay part of a state bailout that Germany’s main airline received during the coronavirus crisis.
All major European sub-indices were down in morning trading, with healthcare, utilities, food and beverage and real estate posting the smallest declines. The group is seen as a safer bet in times of heightened economic volatility.
Report by Sagarika Jaisinghani in Bengaluru; Editing by Arun Koyyur