Europe open: Shares down as traders look for direction ahead of ECB

European stocks were lower at the open as the recent rally evaporated and investors struggled for direction amid another dump of corporate earnings and ahead of the European Central Bank’s rate-setting meeting on Thursday.

The pan-European Stoxx 600 index was down 0.31% at 495.85 in early deals. Investors were also digesting China’s plans to target a gross domestic product growth target of “around 5%” for 2024 and lift defence spending by 7.2%.

“Market momentum stalled in the US in the immediate absence of any more economic clues, although the remainder of the week looks likely to plug that gap,” said Interactive Investor head of markets Richard Hunter.

“Federal Reserve Chair Jerome Powell is set for a two-day testimony to Congress, during which he is likely to double down on the central bank’s data dependent policy. The most recent data has placed a large question mark on the shorter term future for interest rates, with the economy continuing to confound and possibly even in a position to avoid a recession which had previously been taken as read.”

In equity news, shares in Inchcape slumped almost 9% after the UK automotive company said it expects growth to moderate in the coming year.

Thales rose almost 7% after the French defence contractor reported higher annual profits and sales.

Reporting by Frank Prenesti for Sharecast.com