(Bloomberg) — European equities fell on Tuesday as political uncertainty in France and Germany weighed on sentiment, with traders also bracing for euro-zone inflation data and a US rate decision due tomorrow.
The Stoxx Europe 600 Index ended the session 0.4% lower, declining for a fourth day, with banks, energy stocks and telecoms among the biggest laggards.
Among individual stocks, Bunzl Plc shares dropped after the wholesaler gave a trading update, which flagged a hit from deflation. Universal Music Group NV shares rose after its Virgin unit bought indie music specialist Downtown Music Holdings LLC for $775 million in cash.
It’s a tumultuous period for politics in the euro area’s two largest economies. German Chancelor Olaf Scholz lost a confidence motion Monday, triggering an election that will likely take place on Feb. 23. In France, freshly appointed premier Francois Bayrou must pick a government and quickly piece together a 2025 budget.
European equities this year have underperformed the US, which has benefited from its high concentration of technology stocks. The Stoxx 600 Index is up just 7.2% in 2024 compared with the S&P 500 Index’s 27% gain.
Frederique Carrier, head of investment strategy for RBC Wealth Management in the British Isles and Asia, said that while Europe’s macroeconomic and geopolitical challenges warrant an underweight equity position on a six to 12-month view, there could be opportunities ahead.
“Because of the current extreme negative sentiment and very low valuations, we think a trading opportunity could arise in European equities over the coming months,” Carrier said. “Given current depressed valuations, we would focus building positions in world-leading companies that happen to be listed in Europe and that benefit from and drive structural global trends.”
Europe’s equities have managed to rally into the year-end, with the benchmark up 1% in December as optimism over potential Chinese stimulus measures boosted sectors most-exposed to the Asian nation’s economy, such as makers of luxury goods and autos.
For more on equity markets:
Being Short Luxury Is Getting Less Obvious Now: Taking StockM&A Watch Europe: Britvic Avoids Phase 2 Review, UMG, VallourecCanal+’s Spin-Off From Vivendi Boosts London Market: ECM WatchUS Stock Futures Little Changed; EVgo, Red Cat FallFirst Home Frenzy: The London Rush
You want more news on this market? Click here for a curated First Word channel of actionable news from Bloomberg and select sources. It can be customized to your preferences by clicking into Actions on the toolbar or hitting the HELP key for assistance. To subscribe to a daily list of European analyst rating changes, click here.
–With assistance from Sagarika Jaisinghani and Michael Msika.
©2024 Bloomberg L.P.
Source link : http://www.bing.com/news/apiclick.aspx?ref=FexRss&aid=&tid=6761d3c910ac492f94a02a33623e360e&url=https%3A%2F%2Fwww.bnnbloomberg.ca%2Fbusiness%2Fcompany-news%2F2024%2F12%2F17%2Feuropean-stocks-fall-as-politics-weighs-ahead-of-key-releases%2F&c=4867110825099560469&mkt=de-de
Author :
Publish date : 2024-12-17 10:39:00
Copyright for syndicated content belongs to the linked Source.
