Europe open: Stocks pull back ahead of inflation data

2nd Jul 2024 08:36

(Sharecast News) - European stocks pulled back on Tuesday morning following strong gains the day before as investors awaited eurozone inflation data from June and mulled the market impact of political uncertainty in France.

The pan-European Stoxx 600 index was down 0.7% early on at the 509 mark with losses of 0.6-0.8% seen across most major indices - though Madrid's Ibex 35 dropped 1.3%.

After rising strongly the previous session, stocks in France were retreating amid the prospect of a hung parliament following the weekend's snap election which showed the far-right anti-immigrant National Rally party in front.

"France's quickly assembled anti-far-right coalition's effectiveness will be evident today, as candidates have until Tuesday evening to withdraw from Sunday's pivotal second-round vote, leaving only those with the best chance of winning," said analyst Patrick Munnelly from Tickmill Group.

"After the anti-immigrant, eurosceptic National Rally's strong performance in the first round, the focus among its opponents is to prevent Marine Le Pen's party from gaining a majority."

At 1100 CEST, Eurostat will publish the figures of June's harmonised index of consumer prices, which is expected to show that the annual rate of inflation across the eurozone eased to 2.5% from 2.6% in May. The core rate is tipped to ease to 2.8% from 2.9%.

Also in focus will be the release of eurozone unemployment figures from May, along with speeches from a number of members of the European Central Bank, including president Christine Lagarde.

Market movers

Spanish stocks fell sharply, with heavyweights Santander, Inditex and Telefonica among the worst performers.

Fresh catering group Sodexo was a heavy faller after missing sales forecasts in the third quarter. Organic sales grew 6.8% to €6.07bn, coming up short of the €6.11bn estimate.

Sainsbury's also fell despite boasting a "market-beating" grocery performance in its first quarter, as like-for-like sales growth slowing dramatically on the back of declines in general merchandise sales and at its Argos division.