Europe midday: Stoxx slides into red ahead of ECB as Swiss slice rates
European shares slid into the red as traders assessed a bigger-than-expected cut in interest rates by the Swiss National Bank and awaited a decision from the European Central Bank.
The pan-regional Stoxx 600 index was down 0.17 at 519.26 points. Shares on Wall Street were boosted by a record finish for the tech-heavy Nasdaq, which passed 20,000 points for the first time overnight.
Switzerland's central bank has slashed its benchmark interest rate by more than expected amid a strengthening franc and tepid economic growth with inflation running lower than expected.
The Swiss National Bank (SNB) SNB policy rate was cut by 50 basis points to 0.5%, its lowest level in two years and below the cut to 0.75% expected by the market.
This was the biggest cut to rates in almost a decade and followed three straight 25bp reductions at previous meetings. The Swiss franc dropped 0.6% against the euro following the decision to 1.0711 but has still risen nearly 5% since mid-July.
The EuroSTOXX50 benchmark index for the eurozone gave up early gains to be down 0.03% at 4,958 amid expectations that the ECB will cut rates by 25 basis points. The bank is also scheduled to release its quarterly macroeconomic projections on growth and inflation.
In equity news, shares in Sopra Steria fell sharply at the open as the French IT company prepared to unveil financial targets at its annual investor day.
Lonza stock rose as the Swiss pharma multinational said it planned to exit the capsules and health ingredients business, as it faced a decline in post-Covid pandemic demand for pharmaceutical supplies that had surged during the crisis.
Pirelli shares gained after a report in the Il Messaggero daily stated Camfin, the tiremaker's second-largest shareholder was planning to lift its holding to just under 30%.
Reporting by Frank Prenesti for Sharecast.com