Muted Start for European Shares Post ECB Rate Cut

European shares opened slightly lower on Friday following a rate cut by the European Central Bank that previously boosted stocks. The STOXX 600 index saw modest declines led by real estate, while some sectors like basic resources remained positive. Notably, Volvo and British American Tobacco experienced losses.

European shares kicked off Friday on a subdued note after reaping gains from the European Central Bank's latest rate cut and encouraging earnings reports.

The STOXX 600 index showed a slight decrease of 0.05% at 0718 GMT, with real estate firms leading the decline at 0.6%, though basic resources and automotive sectors provided some buoyancy. On Thursday, the ECB reduced interest rates to 3.25%. Although ECB President Christine Lagarde refrained from hinting at future policy moves, sources suggest a possible fourth cut this December if the economic data remains stable.

Among individual stocks, Volvo's shares decreased by 3% following a larger than anticipated drop in third-quarter adjusted operating profit and forecast static demand for the following year. British American Tobacco's shares also dropped by 2% after disclosing progress in resolving Canadian tobacco litigation. Meanwhile, Swiss firms Avolta and Barry Callebaut saw a rise of 2% to 3%, bolstered by upgrades from Deutsche Bank and Morgan Stanley.

(With inputs from agencies.)