Sluggish European stocks make little progress

European stock markets dipped lower on Wednesday, weighed down by renewed expectations of US rate hikes this year.

London - European stock markets dipped lower on Wednesday, weighed down by renewed expectations of US interest rate rises this year, and some weak corporate earnings.

The pan-European FTSEurofirst 300 index declined by 0.2 percent, while the euro zone's blue-chip Euro STOXX 50 index fell 0.4 percent.

Swiss hearing aid maker Sonova was among the worst-performing stocks in Europe, slumping 8.3 percent after missing its full-year sales and profit targets.

On Tuesday, data showed that US consumer prices recorded their biggest increase in more than three years in April, pointing to a steady inflation build-up that could give the Federal Reserve ammunition to raise interest rates later this year.

A US Federal Reserve policymaker also said he would push for an interest rate hike in June or July while two others still saw up to three rate increases this year, leaving the door open to a change in monetary policy relatively soon.

“The spectre of a US rate hike is leading to a bit more cautious sentiment and negativity creeping into the stock markets,” said Hantec Markets' analyst Richard Perry.

Investment bank Goldman Sachs also cut its view on global equities, downgrading the asset class to “neutral”.

“Until we see sustained earnings growth, equities do not look attractive, especially on a risk-adjusted basis,” Goldman Sachs wrote in a note.

The FTSEurofirst is down by around 9 percent so far in 2016, with concerns about a China-led global economic slowdown having impacted world stock markets this year.

REUTERS