European stocks weaken, with focus on central banks; Lonza down after CEO departure -September 18, 2023 at 10:28

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* SocGen shares fall after new strategy shows little growth

* Swiss drugmaker Lonza’s CEO leaves, shares fall

* Nordic Semiconductor bottoms STOXX after lowering Q3 guidance

* ECB’s Stournaras urges government to rein in inflation – report

* STOXX 600 down 0.4%

Sept 18 (Reuters) – European shares fell on Monday after strong gains last week, as investors braced for a week of global central bank meetings, including interest rate decisions from Norway, Sweden, Switzerland, Britain and the United States.

The pan-European STOXX 600 was down 0.4% at 0805 GMT, as interest rate-sensitive healthcare and technology stocks put pressure on the index.

Global central banks will be in the spotlight this week after the European Central Bank (ECB) announced last week that it would halt interest rate increases. The Bank of England (BoE) is likely to raise interest rates for the 15th time this weekend, while the Federal Reserve looks set to take a hawkish pause.

“If the BoE does implement a rate hike, we expect it to be similar to the ECB, with subsequent comments indicating that they are likely to do so,” Mohit Kumar, chief European economist at Jefferies, said in a note.

“CPI data released just a day before the MPC meeting could influence decisions if the data is particularly surprising.”

Goldman Sachs cut its final BoE interest rate forecast by 25 basis points to 5.5%.

Markets remained cautious, while eurozone bond yields moved higher following hawkish comments from several ECB officials following their interest rate decision.

ECB Governing Council member Yannis Stournaras said governments must do their part to rein in consumer prices after borrowing costs reached possibly peak levels, Bloomberg News reported on Sunday.

Nordic Semiconductor ASA fell 13.2% to the bottom of the STOXX 600 after the company cut its third-quarter earnings guidance. Peer Fingerprint Cards fell 5.8%.

Societe Generale fell 6.3% after France’s third-largest bank said it expected little or no annual revenue growth in coming years in its new CEO’s highly anticipated strategic plan.

Lonza’s chief executive, Pierre-Alain Ruffieux, left the Swiss company by mutual consent at the end of the month, sending shares of the contract drugmaker tumbling 9.6% amid concerns about the group’s earnings prospects in the medium term.

S4 Capital, Martin Sorrell’s advertising group, fell 22% after cutting its full-year guidance for the second time in as many months, saying recession fears were making clients cautious. (Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Varun HK and Savio D’Souza)

Rebecca Burke

"Coffee trailblazer. Analyst. General music geek. Bacon maven. Devoted organizer. Incurable internet ninja. Entrepreneur."

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