Europe open: Shares down ahead of big week as Philips plunges

European shares opened the week lower as investors braced themselves for the never-ending deluge of corporate news and a policy meeting of the US Federal Reserve later in the week.

The pan-European Stoxx 600 index was down 0.38% in early deals with all major continental bourses lower.

Economists are expecting a 75 basis point hike to interest rates by the US central bank. The European Central Bank last week brought in a 50 basis point increase, larger than previously suggested.

Hawkish ECB policymaker Robert Holzmann told an Austrian broadcaster on Sunday that the Governing Council will consider the economic landscape across the euro zone before determining whether another big rate hike will be feasible in September.

“It is a busy week for the market with a slew of earnings, the Fed’s interest rate decision and US GDP figures. Following a softer session overnight in Asia with the Nikkei leading the declines, European markets have opened lower with US futures also pointing to a weaker start amid risk-off sentiment,” said Interactive Investor head of investment Victoria Scholar.

“Oil prices are trading lower with brent crude under pressure for the fourth consecutive session as the market braces for another US interest rate hike on Wednesday. Aggressive action from the Fed to combat inflation could add to pressures on the global economy and reduce global energy demand, particularly if it induces a US recession.”

In equity news, Philips shares plunged 9% after the Dutch medical equipment company missed second-quarter core earnings expectations by a significant margin and cuts full-year and mid-term profit outlook.

Verbund gained 3.3% after Barclays upgraded the Austrian electrical company’s shares to “overweight.”