European stock markets experienced moderate declines by midday on Monday as traders remained cautious, awaiting clear updates on tariffs from President Donald Trump, as well as insights regarding the ongoing conflict between Ukraine and Russia. Despite the overall downward trend, real estate, food, and oil stocks showed resilience and registered gains.
Conversely, sectors such as banking and technology lagged behind, reflecting broader market concerns. Investors were closely monitoring Wall Street futures, which indicated negative performance, and the mixed results seen on Asian stock exchanges overnight. Notably, the Hong Kong Hang Seng index witnessed a significant drop of 1.9%, driven by soft inflation reports from Beijing, which rekindled fears that the robust Chinese economy might be facing stagnation. In economic updates, the Eurozone Sentix Investor Confidence indicator posted a reading of negative 2.9 for March, a notable improvement from negative 12.7 recorded in February, hinting at a cautious recovery in investor sentiment. Adding to the day's developments, HSBC downgraded its outlook for US equities amidst ongoing tariff uncertainties but displayed a more optimistic stance regarding European stocks based on anticipated increased government spending in Germany.
This sentiment aligns with movements in the pan-continental Stoxx Europe 600 Index, which was down by 0.6% during midday trading. Sector-specific performance revealed the Stoxx Europe 600 Technology Index contracted by 1.6% while the Stoxx 600 Banks Index slipped by 1.4%. In contrast, the Stoxx Europe 600 Oil and Gas Index increased by 0.2%, and the Stoxx 600 Food and Beverage Index saw a slight rise of 0.3%.
Furthermore, the REITE, a European Real Estate Investment Trust (REIT) index, experienced a notable gain of 1.2%, while the Stoxx Europe 600 Retail Index dipped 0.2%. On the national front, key market indexes highlighted Germany's DAX slipping by 1%, and London's FTSE 100 lowering by 0.4%. Similarly, the CAC 40 in Paris recorded a decrease of 0.5%, and Spain's IBEX 35 dropped by 1%. Bond yields for benchmark 10-year German bonds remained steady, hovering around 2.8%.
In the commodities market, front-month North Sea Brent crude oil futures were trading at $70.66 per barrel, reflecting a modest increase of 0.4%. Furthermore, the Euro Stoxx 50 volatility index surged by 1.7%, reaching 23.04, signaling heightened volatility expectations for European stock markets over the coming 30 days.
A reading surpassing 20 indicates anticipated market turbulence, while figures below suggest a more stable trading environment..