Miners knock European stocks lower ahead of key central bank decisions

(Reuters) – European shares eased from record levels on Tuesday as traders eyed upcoming central bank meetings for clues on tapering and rate decisions, while a plunge in iron ore prices hurt miners.

FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, October 29, 2021. REUTERS/Staff

The pan-European STOXX 600 index slipped 0.1%, while Asian stocks were mixed on jitters ahead of U.S. Federal Reserve and Bank of England meetings this week where the central banks could scale back pandemic-era stimulus.

Mining stocks led losses, down 3% on a fall in the iron ore market and lower copper prices. Anglo American Plc and ArcelorMittal were among the top decliners. [MET/L]

The STOXX 600 closed at a record high on Monday on the back of strong earnings and a jump in bank stocks fuelled by expectations of a rate hike by the European Central Bank next year.

“The environment of higher inflation and higher yields favours certain corporates, but it’s uncertain for others, which leaves you in a very volatile market,” said Bert Colijn, senior economist at ING.

“But the underlying moves are positive, with better-than-expected GDP figures and a quicker-than-expected recovery.”

A survey showed euro zone manufacturing activity remained strong in October, but supply chain bottlenecks and logistical problems sent input costs soaring and curtailed growth.

About half of the STOXX 600 companies have reported quarterly earnings so far and 64% have topped profit estimates, according to Refinitiv IBES data. In a typical quarter, 52% beat estimates.

Meal-kit delivery firm HelloFresh surged 13.8% after raising its sales forecast for 2021, helping Germany’s DAX stay afloat.

German dialysis specialist Fresenius Medical Group also gained 3.9% after reporting an earnings beat and firming up its full-year outlook.

Gains in healthcare and technology stocks limited overall losses in markets.

Weighing on UK’s blue-chip FTSE 100, the world’s largest online betting group Flutter Entertainment dropped 7.1% after trimming its full-year forecast due to unfavourable sports results and a temporary closure of its Dutch operations.

London-based Standard Chartered slumped 8.3% despite reporting a doubling in profit for the third quarter. The bank said it had $4.2 billion in exposure to China’s real estate sector, where China Evergrande Group has been grappling with an enormous debt pile.

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