European stocks showed mixed performance on Monday, following a recovery from a five-day losing streak in the previous session.
Investors remained cautious ahead of the televised U.S. presidential debate and upcoming U.S. inflation data, both of which could impact expectations for future interest rate decisions. Market participants are also closely monitoring the upcoming meetings of the European Central Bank (ECB) and the U.S. Federal Reserve.
Analysts are divided on whether the Federal Reserve will implement a standard 25 basis point (bps) rate cut or opt for a larger 50 bps reduction at its meeting on September 17-18.
In economic data, Germany’s consumer price inflation in August softened, as expected, due to lower energy prices. Final data from Destatis confirmed that inflation eased to 1.9% in August, down from 2.3% in July, in line with initial estimates.
Meanwhile, the British pound gained slightly against both the euro and the U.S. dollar after data suggested the U.K. economy remains robust. Official figures showed that the U.K. unemployment rate fell to 4.1% in the three months leading up to July, compared to 4.2% in the previous period. However, wage growth slowed to a two-year low, with average earnings excluding bonuses rising by 5.1%, as anticipated, but lower than the previous 5.4%.
Ashley Webb, an economist at Capital Economics, noted that the slowdown in wage growth is a positive sign but unlikely to prompt a back-to-back rate cut by the Bank of England in September.
Across European markets, the pan-European STOXX 600 dipped by 0.1% to 09.98 after a 0.8% rise on Monday. Germany’s DAX dropped 0.4%, the U.K.’s FTSE 100 shed 0.6%, while France’s CAC 40 inched up 0.1%.
In corporate news, AstraZeneca fell 4.5% after mixed results in a late-stage trial for its lung cancer treatment. Gamma Communications surged 7% following a strong earnings report, buoyed by acquisitions. Centamin saw a nearly 24% jump after AngloGold Ashanti made a $2.5 billion bid to acquire the gold mining company.
Elsewhere, hearing aid manufacturer Amplifon dropped 6.2% after Apple revealed that its new AirPods would feature built-in hearing aids. Meanwhile, Capgemini shares soared 7% after Oracle reported better-than-expected earnings and announced plans to bring its database services to Amazon Web Services (AWS).
