Europe open: Shares lower as hopes of early US rate cut take hit

19th Feb 2024 08:05

(Sharecast News) - European shares opened the week lower on Monday with US markets closed for the Presidents Day holiday and investors eyeing a potential two-way battle for struggling UK electrical retailer Currys.

The pan-European Stoxx 600 index opened 0.14% lower at 490.9 after making strong gains last week. China shares rose as traders returned from the Lunar New Year holidays with sentiment boosted by upbeat travel data.

"With a key (US) inflation reading, the producer prices index, coming in hotter than expected on Friday, investor hopes of rapid cuts to interest rates by the Federal Reserve have cooled off, leading to more risk-off sentiment," said Hargreaves Lansdown analyst Susannah Streeter.

"Friday falls on Wall Street, have prompted wariness in London, with not much cheer emanating from Asia. Brent Crude has headed lower, as investors assess demand prospects going forward, if borrowing costs stay high in the United States, particularly with the Chinese economy showing little sign of powering up any time soon."

In equity news, Currys looked to be at the centre of a takeover battle between US private equity outfit Elliott and Chinese ecommerce giant JD.com. Currys management said it had already rejected a £700m approach from the former, claiming it "significantly undervalued" the chain.

Shares of AstraZeneca rose after the US Food and Drug Administration approved use of the company's blockbuster cancer drug Tagrisso with chemotherapy to treat a type of lung cancer.

Meantime, shares of German IT company Bechtle were lower after Barclays rated the stock as "underweight".

Reporting by Frank Prenesti for Sharecast.com