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European Bank, energy stocks fall STOXX 600 targets fifth consecutive weekly gain By Reuters

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© Reuters. FILE PHOTO: The DAX chart of the German Stock Price Index is displayed on the Frankfurt Stock Exchange, Germany, on June 17, 2021. REUTERS / Staff

By Sagarika Jaisinghani

(Reuters) – A drop in banking and energy stocks hit European stocks on Friday, with a tough policy outlook from the US Federal Reserve that also held back the fifth consecutive weekly gain.

The banking index, which normally performs well when interest rates are high, fell 1.2% to follow an overnight decline in its US peer, as investors posted gains after steady gains in the US. sector this year. ()

Insurance companies, telecommunications stocks and energy stocks lost between 0.8% and 1.2%, while industrial and real estate stocks were among the biggest gains.

At 0824 GMT, the pan-European STOXX 600 Index was down 0.2%.

“The market has become polarized in certain positions,” said Andrea Cicione, TS Lombard’s head of strategy.

“We have been very positive in finance and energy since last November and now we are seeing a reversal of that as investors back off. But this is a temporary phase; there are definitely more advantages for finance and energy, which are still relatively cheap. . “

The STOXX 600 recently climbed all-time highs on assurances from the European Central Bank that it would keep monetary policy loose, but unexpected signals from the Fed about reducing its massive stimulus hit demand for risk stocks this week.

If the European benchmark had finished higher on Thursday, it would have marked its longest winning streak in nearly 15 years.

The index fell 0.3% as data showed a larger-than-expected rise in producer prices for May. But German bond yields fell slightly, and analysts expected the adverse reaction of euro zone bond prices to the Fed to be short-lived.

Switzerland’s premier stock index, SMI, rose 0.4% to hit an all-time high and was on track for its 14 consecutive days of gains.

The European mining index fell 0.1%, bringing its weekly decline to more than 5% due to lower metal prices. [MET/L]

Danish pharmaceutical company Orphazyme plunged 60.1% after saying it had failed to get support from the US Food and Drug Administration for its drug arimoclomol, a treatment designed for the genetic disorder of the disease. Niemann-Pick type C.

Tesco (OTC :), Britain’s largest retailer, fell 2.3% as it reported a sharp slowdown in underlying UK quarterly sales growth, while Inchcape car dealer (OTC: ) beat the STOXX 600 after raising its annual earnings forecast.

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