European shares fall as investors take cover ahead of ECB rates meeting

European shares declined on Wednesday as investors exercised caution in advance of the European Central Bank (ECB) rates meeting the following day and as technology and luxury stocks took a hit after disappointing results from computer chips group ASML and fashion conglomerate LVMH.
The pan-European Stoxx 600 index lost 0.3 per cent, retreating further from the over two-week high hit early on Tuesday.
The Iseq All-Share index fell 0.3 per cent to 9,814.41. Banks were out of sorts as investors fretted about the pace at which the ECB will cut rates in the future, with a 0.25 of a percentage point reduction widely expected on Thursday.
In additional, RBC Capital Markets began coverage of the sector with a note of caution on consensus earnings forecasts. It also set price targets that pointed to the downside for each of the three Irish banks.
AIB slid 3.1 per cent to €4.94, while Bank of Ireland dropped 4.2 per cent to €8.94 and PTSB declined 0.9 per cent to €1.64.
Property stocks Cairn Homes, Glenveagh Properties and Ires Reit, which should ordinarily benefit from falling rates, were generally lower.
Ryanair was also in focus, dipping 0.3 per cent to €17.38, as the airline group’s chief executive, Michael O’Leary, said it will have to revise down its passenger estimates for next year because of expected aircraft delivery delays from Boeing.
UK shares rose while the pound weakened to a nearly two-month low against the US dollar after official figures showed inflation fell to its lowest level since 2021 last month. The FTSE 100 gained almost 1 per cent.
Data from the Office for National Statistics showed UK Consumer Prices Index inflation fell to 1.7 per cent in September, down from 2.2 per cent in August.
Tate & Lyle jumped 8.3 per cent amid reports that US-based private equity firm Advent International was preparing to make an offer to buy the sweetener maker.
An offer from Advent, which has not yet been made, could exceed Tate & Lyle’s market value of £2.8 billion, according to reporting in the Financial Times.
Shares in Whitbread also rose after the Premier Inn owner said it had ramped up cost-saving efforts as it reported a 22 per cent slump in pretax profits over the first half of the year.
ASML, the world’s biggest chipmaking equipment manufacturer, shed another 5.1 per cent to hit a 10-month low. Its weak 2025 sales forecast on Tuesday sparked its steepest one-day decline in nearly three decades.
The luxury sector also faltered as France’s LVMH dropped 3.7 per cent, the stock’s biggest one-day drop in over one month, after the company reported weaker third-quarter sales.
[ LVMH plunges as Chinese luxury spending slowdown worsensOpens in new window ]
Peers Gucci-owner Kering, Hermès and Richemont fell between 0.8 per cent and 1.3 per cent.
Shoemaker Adidas fell 6.3 per cent despite raising its full-year sales and profit guidance.
Just Eat Takeaway lost 8.8 per cent after the food delivery company missed expectations for third-quarter gross transaction value.
Tecan dropped 14.5 per cent after the Swiss life science equipment maker cut its annual outlook.
US stocks were mixed in early afternoon trading and gold gained strength as bank earnings continued to beat expectations, while fears of softening global demand weakened so-called megacap growth stocks and quelled investor risk appetite.
The S&P 500′s gains appeared to be held in check by underperforming megacap growth stocks, which pulled the Nasdaq into negative territory.
The blue-chip Dow, powered by financial shares, was modestly higher.
Large banking firms have reported a string of upbeat earnings. Most recently, Morgan Stanley reported consensus-beating quarterly profit, sending its shares to a record high.
On Tuesday, chip equipment maker ASML forecast weaker than expected 2025 sales, prompting demand concerns.
Oil prices dipped as expectations for ample supply offset simmering Middle East tensions, while Opec and the International Energy Agency tempered their global demand forecasts for 2024 and 2025.
– Additional reporting, Reuters