/cdn.vox-cdn.com/uploads/chorus_asset/file/24016885/STK093_Google_04.jpg)
/cdn.vox-cdn.com/uploads/chorus_asset/file/24808816/Starfield__The_Settled_Systems___Supra_Et_Ultra_____Starfield__The_Settled_Systems___Supra_Et_Ultra_2023_7_25_94252.263_1440p_streamshot.png)
European equities fell on Monday, led by losses in mining and basic materials stocks, as investors said a slow economic recovery in China would curb demand.
Europe’s region-wide Stoxx 600 was down 0.6 percent in early trading hours, while France’s CAC 40 was down 0.4 percent and London’s FTSE 100 was down 0.4 percent.
The S&P 600 Basic Resources Index declined 1.4 percent across the sector. Glencore fell 0.9 per cent and Rio Tinto 1 per cent in London, while ArcelorMittal fell 1.3 per cent in Luxembourg.
Asian equities were down, with Hong Kong’s Hang Seng index down 0.8 per cent, while China’s CSI 300 shed 0.8 per cent as investors expected the People’s Bank of China to boost its benchmark economy on Tuesday. Will cut loan prime interest rates. Trading is expected to be weak on Monday as US markets will be closed for a federal holiday.
Traders were awaiting key UK economic data and a monetary policy decision from the Bank of England later this week. Markets are expecting another quarter-point hike from the BOE, which would raise rates to a 15-year high of 4.75 percent.
Earlier on Wednesday there will be data that is expected to show that the annual rate of consumer price inflation in Britain rose to 8.5 percent in May, up from 8.7 percent in April, but well above the central bank’s target.
“The Bank of England’s task of engineering a soft landing for the economy has been made tougher by resilient activity and sticky inflation,” said Ian Stewart, Deloitte’s chief economist in the UK.
The yield on the two-year gilt, sensitive to interest rate changes, rose 0.05 percentage points to 4.98 per cent and hit its highest level since 2008. The yield on the 10-year benchmark rose 0.01 percentage point to 4.42 per cent. Bond yields rise as prices fall.
The fall in stock prices on Friday came after US indices posted their biggest weekly gains since late March as investors hoped the Federal Reserve neared the end of its historic tightening drive to tame inflation.
The Fed last week halted its drive to raise interest rates for the first time in more than a year, even as it suggested there would be more rate hikes ahead.
The dollar, which strengthens when investors expect higher rates, rose 0.1 percent against a basket of six peer currencies after the Fed’s policy announcement lifted.
