Europe’s STOXX 600 declines as resources shares, luxury brands fall
By Shristi Achar A, Pranav Kashyap and Shashwat Chauhan
(Reuters) -European shares fell on Tuesday as commodity-linked stocks tracked declining prices and luxury brands fell after Hugo Boss’ dour annual forecast, while markets also assessed the chances of Donald Trump winning the U.S. presidential race.
The pan-European STOXX 600 closed 0.3% lower, with the basic resources sub-index leading sectoral declines with a 1.7% fall, tracking slipping base metal prices. [MET/L]
Adding to the sector’s losses, London-listed shares of Rio Tinto fell 2.3% after the global mining giant reported second-quarter iron ore shipments below estimates.
Heavyweight energy shares lost 0.9% amid an about 1% fall in crude oil prices. [O/R]
Shares of Hugo Boss tanked 7.5% after the German fashion house cut its sales and earnings forecasts for the year, citing weakening global consumer demand, especially in China and the UK.
Other luxury players in the region also remained under pressure with a gauge of the top ten European luxury stocks down over 1%, extending losses after a 3% fall in the last session.
On the data front, the ZEW economic research institute said German investor morale deteriorated more than expected in July, registering its first fall in a year, and suggested the recovery in the euro zone’s largest economy will be bumpy.
The European Central Bank will hold its policy meeting later this week, where it is widely expected to hold interest rates. Investors will however focus on remarks from policymakers to ascertain the timing of future rate cuts. [0#ECBWATCH]
“We expect the European Central Bank to take a breather at this week’s meeting, pausing to ensure everything is on track before cutting rates further in September,” said Jill Hirzel, senior investment specialist at Insight Investment.
Market focus continued to be on political developments in the United States following the attempted assassination on Saturday of Trump, who nominated J.D. Vance on Monday as his vice presidential running mate.
Among other stocks, French re-insurer Scor plunged 24.6% to its lowest since March 2023 after cutting guidance for its life and health unit. The stock dragged the insurance sub-index down 1%.
Ocado jumped 5.9% after the British online grocer and technology group lifted its annual profit margin forecast for its key warehouse technology division.
Swedish banking group SEB rose 2.7% on reporting a better-than-expected quarterly net profit and maintaining its annual cost outlook, as other revenue streams helped offset pressure from an easing interest income momentum.
(Reporting by Shristi Achar A, Pranav Kasyap and Shashwat Chauhan in Bengaluru; Editing by Sherry Jacob-Phillips, Shounak Dasgupta and Vijay Kishore)
