STOXX 600 flat; German corporate morale drops to 86.6; Technology sector down 1%; Meyerburger plummets 45%; UK markets closed
(Reuters) – European stocks were little changed in quiet trading on Thursday, with semiconductor shares leading technology declines as investors awaited several key economic data this week for further clues on the direction of monetary policy.
European semiconductor stocks fell amid focus on U.S.-listed artificial intelligence (AI) giant Nvidia's (NVDA.O) (opens in a new tab) second-quarter results due on Wednesday. The Technology sector (.SX8P) (opens in a new tab) fell 1%, providing the biggest drag on the European benchmark. ASML Holdings (ASML.AS) (opens in a new tab), ASM International (ASMI.AS) (opens in a new tab) and Aixtron (AIXGn.DE) (opens in a new tab) fell between 1.6% and 2.7%.
Investors are awaiting key economic data this week for further signals about the European Central Bank's (ECB) policy stance when it meets on Sept. 12. Traders are broadly pricing in a 25 basis point rate cut.
The main release this week will be flash EU inflation figures on Friday, with consumer price indexes for France, Italy and Spain and eurozone industrial and economic data also due to be released this week.
The pan-European STOXX 600 index (.STOXX) was flat at 518.05 as of 1600 GMT.
The index has posted gains for the past three sessions and is still trading near its highest level in about a month.
Germany's benchmark stock index (.GDAXI) pared initial losses to close about 0.1 percent lower after a survey showed business morale in Europe's largest economy fell in August.
“The German economy seems to be back to where it was a year ago. The euro area's growth lag is clear and there are few signs of improvement in the near term,” said Carsten Brzeski, head of global macro at ING.
Data on German gross domestic product (GDP), employment and retail sales is due to be released this week.
Global markets will also be watching U.S. personal consumption expenditure data on Friday for further signals on the extent of the widely expected Federal Reserve interest rate cut in September, after Fed Chairman Jerome Powell said in a recent speech that “the time for easing has come.” In contrast, ECB chief economist Philip Lane was more cautious, saying tight monetary policy remains necessary as success in fighting inflation is far from assured. Bank of England Governor Andrew Bailey also said he is in no rush to cut rates further. Interest-rate sensitive real estate (.SX86P) was the top sector gainer, rising 1.2 percent, led by Vonovia (VNAn.DE)'s nearly 4 percent gain. Oil and gas (.SXEP) rose 0.7 percent on the back of a surge in crude oil prices. Among individual stocks, Telecom Italia (TLIT.MI) rose 2 percent after reports that Italian banker Claudio Costamagna was planning to assemble a group of investors who might be interested in buying a stake in French telecoms group Vivendi. Swiss solar panel maker Meyer Burger (MBTN.S) slumped 45 percent for its worst ever fall after it halted plans to build a factory in Colorado and further delayed earnings.
The London market was closed for a public holiday.
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Reporting by Pranav Kashyap and Lisa Matakkal in Bengaluru; Editing by Sonia Irene Sorenson and Ross Russell
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