Energy stocks drag European shares lower; Lagarde speech in focus

Reuters

Published Nov 27, 2023 03:37

Updated Nov 27, 2023 04:38

By Shubham Batra

(Reuters) -European shares were muted on Monday hurt by losses in energy stocks, while cautious investors awaited comments from European Central Bank (ECB) President Christine Lagarde on monetary policy later in the day.

The pan-European STOXX 600 index slipped 0.1%, with most peers trading in the red, except Spanish stocks, which rose 0.4%.

Energy shares were the biggest drag, falling 0.8%, after Brent prices fell toward $80 a barrel, as investors awaited the OPEC+ meeting due later this week for an agreement to curb supplies into 2024. [O/R]

Profits at China's industrial firms growing at a slower pace in October also weighed on oil stocks, suggesting more policy support from Beijing was needed to help shore up growth in the top consumer to revive demand.

Rate-sensitive real estate and technology shares gained 0.5% and 0.2%, respectively, ahead of comments from ECB's Lagarde, who will be speaking at 1400 GMT before the Committee of Economic and Monetary Affairs of the European Parliament.

"It is no secret that a number of ECB policymakers continue to push the narrative that rates could go higher," said Michael Hewson, chief market analyst at CMC Markets, UK.

"However, the market simply isn't buying into the narrative, given how quickly inflationary pressure is slowing across Europe, alongside the continued deterioration in the latest economic numbers."

Investors will closely monitor inflation data from Germany and the broader region this week, while also tracking the ongoing budget saga in Germany following a constitutional court ruling this month that threw Berlin's financial plans into disarray.

Other movers this week also include Federal Reserve Chair Jerome Powell's speech on Friday, U.S. third-quarter GDP and personal consumption expenditure (PCE) report.

Airports management firm ADP (NASDAQ:ADP) hit a near one-month low at 4.0% to slip to the bottom of STOXX 600 index.

UK's Rightmove was the top gainer, rising 6.7%, after the property portal lifted its forecast for annual average revenue per advertiser.