European Shares Dip Amid Financial Sector Losses, Boosted by Defence Gains
European shares fell as financials led losses after Fed Chair Jerome Powell’s remarks on interest rates, tracking Wall Street declines. Despite this, defence stocks recorded gains, buoyed by geopolitical developments. The pan-European STOXX 600 index was down 0.3% with Italian benchmarks leading the downward trend.
European shares experienced a downturn on Wednesday, with financial sectors leading the decline, influenced by Wall Street's reaction to Federal Reserve Chair Jerome Powell's comments. Powell's remarks offered little clarity on future interest rate cuts, causing anxiety among investors.
The pan-European STOXX 600 index dropped by 0.3% to 553.2 points, while most regional markets also faced declines. Italian stocks witnessed the most significant losses, dropping 0.4%, as heavyweight banks including Denmark's Sydbank and UK's Barclays each shed about 2%.
In contrast, defence stocks soared, reinforced by geopolitical developments. A statement from U.S. President Donald Trump encouraging Ukraine to regain its territory boosted defence giants like Sweden's Saab, which saw a 4.9% increase. Meanwhile, the economic outlook in Germany dampened after business morale unexpectedly fell in September.
(With inputs from agencies.)
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