European stocks started the week in a cautious mood amid a worrisome economic outlook that raised peak interest rate expectations.
In London, the FTSE 100 (^FTSE) opened on the back foot, down 0.3% as a big week for corporate earnings kicks off. The CAC (^FCHI) fell by 0.3% in Paris and the DAX (^GDAXI) fell by 0.4% in Frankfurt.
“Investors are starting the week with some trepidation ahead of the latest Federal Reserve decision and a barrage of corporate earnings on both sides of the pond,” said Richard Hunter, head of markets at Interactive Investor.
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“The mood remains contemplative with the FTSE 100 slipping in early trade, following a weaker lead from Asian markets.”
It comes as the final two contenders to become Britain’s next prime minister, former Chancellor Rishi Sunak and Foreign Secretary Liz Truss, will face off in a televised debate later on Monday.
Across the Atlantic, Wall Street indices ended a three-day winning streak, closing lower on Friday after weak corporate earnings scared investors.
The tech-heavy Nasdaq (^IXIC) led the pack, falling 1.9%, while the benchmark S&P 500 (^GSPC) lost 0.9% and the Dow Jones (^DJI ) fell 0.4%.
All eyes will be on the Federal Reserve’s rate decision and second-quarter gross domestic product data due later this week.
Michael Hewson, chief market analyst at CMC Markets, said: “This Friday night weakness appears to have heightened concerns that this could be a warning of similar disappointments as we look to owner likes. of Google Alphabet (GOOGL) and owner of Facebook Meta Platforms (META) who are reporting their numbers later this week, starting with Alphabet tomorrow.
“There’s also the not insignificant issue of the latest rate decision from the US central bank which is expected to see the Federal Reserve raise interest rates an additional 75 basis points on Wednesday, following June’s 75 basis points. “
Asian stocks were in the red overnight with the Nikkei (^N225) down 0.8% in Tokyo. In Hong Kong, the Hang Seng (^HSI) was down 0.4%, while the Shanghai Composite (000001.SS) was down 0.6%.