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Banks, oil stocks knock European shares to two-week lows
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Banks, oil stocks knock European shares to two-week lows
Dec 17, 2024 9:37 AM

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Eyes on Fed, BOJ and BoE

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UK pay growth speeds up

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German business sentiment tumbles in December

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UK's Bunzl ( BZLFF ) slides after profit warning

(Updates after markets close)

By Sruthi Shankar and Shashwat Chauhan

Dec 17 (Reuters) - Europe's STOXX 600 fell to two-week

lows on Tuesday, pressured by losses in energy and bank stocks,

as investors awaited a slew of major central bank decisions

later in the week.

The pan-European STOXX 600 index ended 0.4% lower,

its lowest closing level since Dec. 2.

The oil and gas index dropped 1.3% to its lowest

level in 17 months as crude prices slid after

economic data from China renewed demand concerns.

European banks were another drag, down 1.8% with

Spanish lenders such as Santander and Sabadell

at the forefront of losses. The broader Spanish

benchmark dropped 1.6%.

While the U.S. Federal Reserve is widely expected to deliver

a 25-basis-point interest rate cut on Wednesday, the focus will

be the pace of easing next year as the U.S. economy appears to

be on a steady footing. The Bank of Japan and the Bank of

England's rate announcements are due on Thursday.

"The (Fed's) statement and press conference will be very

important to watch; note that last meeting, the Fed removed

forward guidance and turned data dependent," said Naomi Fink,

chief global strategist at Nikko Asset Management.

Weighing on global stocks, the 10-year U.S. Treasury yield,

the benchmark for global borrowing costs,, touched

its highest in more than three weeks. It was last at 4.3790%.

Britain's FTSE 100 fell 0.8% as the pound climbed

after data showed British pay rose by more than expected in the

three months to October, prompting investors to further rein in

bets on rate cuts next year.

Traders expect the BoE to stay on hold on Thursday.

Ranjiv Mann, senior fixed income portfolio manager at

AllianzGI, expects the central bank to "signal its desire to

resume rate cuts in early 2025 given emerging downside growth

risks for the UK economy."

Meanwhile, German business morale worsened more than

expected in December, a survey from the Ifo Institute showed.

A separate survey released by the ZEW institute, however,

showed investors were more optimistic, largely pinning their

hopes on a change in government following the upcoming Feb. 23

election.

Sanofi gained 3.3% after the French drugmaker and

Teva Pharmaceuticals said that their drug, duvakitug,

met the main goals in a mid-stage trial when tested in patients

with inflammatory bowel disease.

Britain's Bunzl ( BZLFF ) fell 5.7% after the business

supplies distributor said stickier than anticipated deflation

will have a slight impact on its annual profit, especially in

its Continental Europe division.

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