- Lindt & Spruengli jump on beating 2023 sales estimates
- Hugo Boss drops on Q4 EBIT miss
- STOXX down 0.4%
Jan 16 (Reuters) - European shares opened lower on Tuesday as investors reined in expectations of interest rate cuts following recent comments from European Central Bank officials, while shares of Lindt & Spruengli jumped on upbeat results.
The pan-European STOXX 600 moved 0.4% lower by 0920 GMT, hitting its lowest intra-day level in over a month.
French central bank Governor Francois Villeroy de Galhau said in Davos the ECB cannot yet declare victory over inflation but its next move is likely to be an interest rate cut sometime this year, adding to the slew of comments from policymakers recently to push back rate cut expectations.
"It comes back to the very optimistic end that we had last year, that we would see a cooling inflation, a soft landing and a pivot to interest rate cuts," said Russ Mould, investment director at AJ Bell.
"If so, that's fine. But if we get anything that does not fit with that comfortable scenario, either stickier inflation or a harder landing, then it does seem logical to expect equity volatility going forward."
Traders now see a near-25% chance of the first rate cut in March, down from more than 30% in the previous week. O#ECBWATCH
Eurozone consumers have slashed their inflation expectations, however, according to an ECB survey, in comforting news for the ECB's efforts to contain prices.
While market participants remain focussed on ascertaining the timing of interest rate cuts from major central banks, the earnings season currently underway in the United States and Europe is also being watched to assess the impact of high interest rates on earnings.
Meanwhile, Germany's inflation rose 3.8% on an annual basis in December, confirming the preliminary data. Germany's DAX 40 was down 0.4%.
Insurers were a drag, down 0.4% after Citigroup downgraded Munich Re and Hannover Re to "neutral", favouring more multi-line names.
Media stocks were a bright spot, up 0.2%, helmed by a 1% rise in Publicis after Goldman Sachs raised the French advertising group to "buy" from "neutral."
Among other movers, Lindt & Spruengli jumped 5.4% after the Swiss chocolate maker said its 2023 sales growth beat market expectations, boosted by higher product prices.
Hugo Boss slumped 10.0% to the bottom of STOXX 600 after the German fashion house missed expectations for fourth-quarter EBIT in its preliminary results.
Reporting by Shristi Achar A in Bengaluru; Editing by Savio D'Souza and Sohini Goswami
Source: Reuters