(Bloomberg) -- European stocks held steady on Monday as investors refrained from taking big bets ahead of a number of key economic releases later in the week.
The Stoxx Europe 600 Index ended the session little changed as an early rebound petered out. While telecoms and mining stocks were the biggest gainers, the health care sector and real estate lagged.
The European gauge is still down 3.7% for the month because of worries that the slowing US economy could tip into recession. Those fears have led to a selloff across markets, a turbulent start to a month in which liquidity tends to be low.
A reading on US consumer inflation due Wednesday and US initial jobless claims on Thursday will be scanned for further clues as to how the economy is holding up, and could serve as the next potential catalysts. In Europe, the latest reading for Germany’s ZEW expectations index on Tuesday and UK inflation on Wednesday will also be in focus.
“At the end of the day, we think investors might get whipsawed several times this week based on macro data from both sides of the Atlantic,” Joachim Klement, head of strategy at Panmure Liberum, said.
The recent market rout has rattled nerves. Data from Deutsche Bank AG showed that investors slashed equity allocations at the sharpest pace since the onset of the Covid pandemic during last week’s bout of market volatility.
“Volatility could return this week, especially following the release of US inflation data for July,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note. He added that, if US inflation is too low, this could raise concerns over a possible recession, while a reading that is too high could intensify worries that the Federal Reserve may not be able too cut rates quickly enough to protect the economy.
Among individual movers, Hannover Rueck SE shares rose as much as 6.3% after the reinsurer’s earnings beat expectations, while BT Group Plc shares jumped 8.4% after Bharti Global Ltd agreed to buy a stake of about 25% from Altice UK in the UK telecom company. Among the biggest individual declines, Vestas Wind Systems A/S tumbled nearly 8% following a profit warning, and JD Sports Fashion Plc dropped more than 4% after an analyst downgrade.
For more on equity markets:
- Too Soon to Call All-Clear After Market Shakeout: Taking Stock
- M&A Watch Europe: BT, Eutelsat, Finastra, Saras, Gold Fields
- US Stock Futures Little Changed
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--With assistance from Sagarika Jaisinghani.
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