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Sept 22 Reuters European shares slipped on Friday and were on track to close a week, packed with central banks39; decisions, sharply lower as investors assessed the prospects that borrowing costs will remain high for some time.

The panEuropean STOXX 600 index inched 0.3 down by 0745 GMT, after ending the previous session more than 1 lower as the Bank of England BOE followed the U.S. Federal Reserve in keeping rates steady, but flagged that the central bank did not think its job was done.

The STOXX 600 fell as much as 0.7 before cutting losses after preliminary data showing a contraction in economic activity in France and Germany raised hopes that the European Central Bank ECB would soften its policy stance.

The BoE warned it expects rates to stay high for an extended period, and it is not alone in this regard, said Dean Turner, chief euro zone and UK Economist, and Matteo Ramenghi, chief investment officer Italy at UBS Global Wealth Management, in a note.

The 39;will they, won39;t they hike39; debate is likely to be with us at least until the end of the year, but on the back of further evidence that inflation pressures are easing, the focus will soon turn to the timing of interest rate cuts.

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