European shares ease as auto, luxury stocks take a knock

European shares slipped on Monday after strong gains last week as automobile and luxury stocks fell, while comments from major central bank officials tamped down bets of early interest rate cuts.

The pan-European STOXX 600 edged 0.1 per cent lower by 09:22 GMT, after logging a five-week winning streak since April as the Federal Reserve's dovish pivot last week boosted rate cut bets.

Automobiles lost 0.9 per cent, with Germany's Mercedes Benz , BMW Group and Volkswagen shedding more than 1 per cent each.

Germany's electrical vehicle subsidy programme is set to end prematurely on Monday after paying out some 10 billion euros since 2016.

Luxury giants LVMH, Richemont and Hermes were also down over 1 per cent, with the broader sector index losing 1.4 per cent.

Swedish financial services provider Nordnet dropped 5.5 per cent to the bottom of STOXX 600 after Barclays downgraded the stock to "underweight" from "overweight", also reducing their price target.

DiaSorin dropped 3.3 per cent after the Italian diagnostics firm issued its 2024-2027 business plan.

Meanwhile, energy was the top sectoral gainer, adding 0.9 per cent, on higher crude prices.

OCI jumped 12.5 per cent, leading gains on the pan-European index, as the Dutch chemicals maker is set to sell its stake in Iowa Fertilizer Company for $3.6 billion.

Vodafone gained 6.4 per cent on Iliad's proposal to merge their Italian businesses, steering a 0.5 per cent rise in telecoms .

Danish shipping company AP Moller-Maersk rose 1.2 per cent after Iranian-backed Houthi militants in Yemen stepped up attacks on vessels in the Red Sea.

Ladbrokes-owner Entain gained 5.3 per cent following a Jefferies upgrade to "buy" from "hold", while Raiffeisen rose 1.3 per cent after Ukraine removed the Austrian lender from a blacklist.

Reuters reported ECB policymakers are keen on retaining the higher-for-longer interest rates message until March, making any cuts before June difficult. Policymaker Bostjan Vasle said expectations for rate cut in March or April are premature.

"In Europe, economic activity is stagnating at best and even now the ECB comes across as being reluctant to counter a rate cut, even though a reduction in borrowing costs is clearly needed, given that headline inflation is back within touching distance of its 2 per cent target," said Michael Hewson, chief market analyst at CMC Markets.

For more clues on the state of the global monetary policy cycle, investors will monitor the euro zone's November consumer prices, Japan's central bank decision and the Fed's preferred inflation gauge- personal consumption expenditure for November throughout this week.