The pan-European Stoxx 600 index was 0.26% lower at 491.08
European stocks opened lower on Tuesday as investors fretted about the timing of interest rate cuts, while UK bank Barclays was in focus after announcing first major overhaul in 10 years.
The pan-European Stoxx 600 index was 0.26% lower at 491.08. All major regional bourses were down. Asia-Pacific markets also dropped overnight, while the US was closed for the Presidents Day holiday.
Data from the US last week unsettled investors who now fear that interest rates may stay higher for longer as the Fed takes a more cautious view on the downward path of inflation.
The People’s Bank of China (PBC) cut the benchmark five-year loan prime rate for the first time since June but left the one-year rate – used for most personal and corporate borrowing – unchanged.
China’s central bank reduced the five-year loan prime rate, used for mortgages, by 25 bps, to 3.95%, more than the 15 bps expected.
’The fragility of China’s economy is weighing on minds as the country remains mired in a real estate crisis with the latest effort to stimulate demand highlighting the depths of the problems, said Hargreaves Lansdown analyst Susannah Streeter.
The sharper than expected cut has not done the trick of shoring up confidence yet. It is concentrated minds on the collision of concerns about the economy, from real estate debts to deflation to falling foreign investment. Iron ore prices are trading near three-month lows, as expectations that demand for steel could bounce back have ebbed away.
In equity news, Barclays advanced 6% after the lender announced a major operational overhaul including massive shareholder payouts, substantial cost cuts, asset sales and a reorganisation of its business divisions as annual profits declined.
