European Shares Falter Amid Economic Uncertainty and ECB Speculations

European shares began the week sluggishly, led by a downturn in miners as investors awaited important economic data and speeches from European Central Bank officials. The pan-European STOXX 600 index fell by 0.4%, while manufacturing data pointed to a continued decline, particularly in Germany. The market reactions were mixed, with Rightmove jumping 21% and German Peer Scout24 advancing.

European shares kicked off the week on a lackluster note, dragged down primarily by a slump in miners. Investors are anxiously awaiting a week filled with crucial economic data and significant speeches from European Central Bank (ECB) officials, which could offer insights into the central bank's monetary policy trajectory.

The pan-European STOXX 600 index dipped by 0.4%, falling from its record highs last week. This comes after eurozone inflation dropped to 2.2% in August, the slowest pace since July 2021. Major European markets, including Germany, Spain, and Italy, also saw a 0.4% decline.

Richard Flax, Chief Investment Officer at Moneyfarm, noted, 'Everyone is taking a breather after a hectic August in market price action and is now looking for macro signals to confirm a soft landing scenario that allows central banks to start lowering rates.' ECB policymakers remain divided on growth outlooks, contributing to ongoing debates about potential rate cuts. Meanwhile, money markets have nearly fully priced in a 25 basis-point rate cut by the ECB for September 12, with total easing expected to reach about 60 basis points by the end of 2024.

(With inputs from agencies.)