European Stocks Retreat Ahead of Fed Meeting; Italian Banks Dip
European stocks edged lower as investors turned cautious ahead of the Federal Reserve’s two-day policy meeting. Italian banks dipped on news that the government was drafting plans to raise another €1.5 billion ($1.8 billion) from lenders.
The Stoxx Europe 600 Index dropped 0.2% at 8:16 a.m. in London. Banks including UniCredit SpA and Intesa Sanpaolo SpA slipped after a Bloomberg report that Italian officials are considering raising the extra funds from lenders in 2027 by postponing their tax deductions.
Mining and auto sectors outperformed, while banks and insurance shares were the biggest laggards. Trustpilot Group Plc jumped 7.9% after it reported revenue for the first half-year that beat the average analyst estimate.
European stocks have inched toward a March record as investors wager on Fed rate cuts alongside a resilient global economy. The central bank is expected to announce its policy decision on Wednesday, and swaps markets are fully pricing in a 25-basis-point reduction.
“We’re sticking to our risk-on call as we see monetary easing shifting from Europe to the US as a positive trend,” said Mabrouk Chetouane, head of global market strategy at Natixis Global Asset Management. “The upcoming Fed rate cuts will bring some oxygen to the market and so far the US tariffs have not fueled inflation, which remains contained.”
Meanwhile, a regional survey by Bank of America Corp. showed investors broadly expect mild gains in European stocks over the coming months, underpinned by corporate earnings.
Source : Bloomberg
