2023-06-09 13:01:34
European stocks fell on Friday, at the end of a week of weak trading, which witnessed reluctance by investors before the issuance of the latest decisions of major central banks.
Croda shares led the main index losses following lukewarm earnings expectations.
Investors fear that the US Federal Reserve may choose a hawkish stance at its meeting next week, while everyone expects the European Central Bank to continue tightening its monetary policy, following repeated statements in this regard by the bank’s president.
Money markets now expect a 72.4 percent chance that the Fed will keep interest rates unchanged at its June meeting, but a 52 percent chance that it will resume rate hikes in July by 25 basis points, according to CME FedWatch Index data.
For the ECB, traders see a 98% chance of a 25bp rate hike next week.
“Our view on the Fed is that they want to stop… However, we expect the Fed to keep the door open for another hike in July,” said Mohit Kumar, a strategist at Jefferies.
Kumar added, “The ECB is in a slightly different position because we don’t think it hasn’t reached the territory it wants yet. We expect a rate hike in June followed by another in July and that would mark the end of the current rate hike cycle.”
price movements
By 12:50 GMT, the European Stoxx 600 index fell 0.30 percent to 459.34 points, and is heading to end the week without achieving significant gains.
Shares of Croda International fell 15.8 percent, topping losses in the STOXX 600, following the British chemical company expected its annual pre-tax profit to miss expectations.
The European chemicals sector index decreased by 1.9 percent, and the sector was the largest decliner among the major European sectors this week, down regarding 3 percent.
On the gainers’ side, the basic resources sector rose 0.8 percent, and is on track for a weekly gain of 2 percent.
Norwegian mineral and renewable energy company Norsk Hydro also led gains on the index, rising 1.8 percent, following agreeing to buy land in Spain to build an aluminum recycling plant.
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