European stocks closed broadly lower on Monday in a cautious trading session, as investors awaited key monetary policy announcements from the Bank of England and the U.S. Federal Reserve.
The Federal Reserve is widely anticipated to announce an interest rate cut on Wednesday. Attention will be on the size of the reduction and the central bank's accompanying statement, which might offer insight into the likelihood of additional cuts in the upcoming months.
The Bank of England is set to reveal its monetary policy on Thursday.
The pan-European Stoxx 600 ended down by 0.16%. The U.K.'s FTSE 100 edged up by 0.06%, while Germany's DAX and France's CAC 40 fell by 0.35% and 0.21%, respectively. Switzerland's SMI concluded the day down by 0.26%.
In the U.K. market, Phoenix Group Holdings dropped over 5%, while Melrose Industries and Spirax Group declined by 2.57% and 2%, respectively.
Other notable decliners included Scottish Mortgage, Prudential, Sage Group, Entain, Beazley, Croda International, and Rolls-Royce Holdings, which all fell by 1% to 1.5%.
Conversely, JD Sports Fashion rose by 3.6%, with Marks & Spencer nearly 3% higher. Kingfisher, Associated British Foods, Tesco, Sainsbury, Diploma, IG Group, 3i Group, Hargreaves Lansdown, Fresnillo, Vodafone Group, Compass Group, and Next gained between 1% and 2.2%.
In the German market, Sartorius and Infineon both declined by approximately 2.5%. Brenntag, Volkswagen, Fresenius, Covestro, Merck, Fresenius Medical Care, BMW, RWE, MTU Aero Engines, and Bayer saw losses ranging from 1% to 2%.
Zalando climbed nearly 2%, while E.ON, HeidelbergCement, Hannover Rueck, Qiagen, and Porsche posted moderate gains.
The French market saw STMicroElectronics drop by about 3.6%, with Dassault Systemes, Capgemini, Kering, Edenred, Teleperformance, and Hermes International declining between 1% and 2%.
On the upside, Bouygues, Veolia, Unibail-Rodamco-Westfield, Carrefour, Engie, Societe Generale, Legrand, and Pernod Ricard registered gains.
In economic news, the euro area trade surplus increased significantly in July, driven by a robust rebound in exports, Eurostat reported on Monday. On an unadjusted basis, the trade surplus surged to €21.2 billion in July from €6.7 billion in the same month last year. In June, the surplus was €21.7 billion.
Eurozone hourly labor cost growth slowed in the second quarter due to a deceleration in wage growth, according to Eurostat data released on Monday. Hourly labor costs increased by 4.7% year-on-year, down from a 5% rise in the first quarter.
In the U.K., house prices rose in September as the traditionally busier Autumn market began early, buoyed by the Bank of England’s interest rate cut, which lowered mortgage rates, and positive election outcomes that bolstered confidence. House prices grew by 0.8% month-on-month in September, according to data published by property website Rightmove.
Switzerland’s producer and import prices continued to decline in August, albeit at the slowest pace in eight months. Producer and import prices fell by 1.2% year-on-year in August, a slight improvement from the 1.7% decline in June. Prices have been falling since May 2023.
