(Bloomberg) -- European equities dipped as uncertainty about the path of US interest rates and potential tariffs curbed risk appetite during a typically positive month for markets.
The Stoxx Europe 600 Index slipped about 0.1% by 8:24 a.m. in London. The travel and leisure sector led losses as Evolution AB slumped after the UK Gambling Commission began a review of its Malta operations. Direct Line Insurance Group Plc shares rose after Aviva Plc agreed to buy the insurer in a deal valuing the firm at around £3.7 billion ($4.7 billion).
European stocks are set for a drop in December — a month that’s historically been positive on average for the Stoxx 600 over the past three decades — amid concerns about the path of Federal Reserve policy, the outlook for tariffs from US President-elect Donald Trump and political uncertainty. The Stoxx 600 Index is up just about 5% this year, far behind the S&P 500 Index’s 24% gain.
A Friday plunge in Novo Nordisk A/S, the region’s biggest public company, after disappointing study results for its new weight-loss drug has also added to European stocks’ woes. The health care giant’s shares are rebounding on Monday.
Some market watchers are seeing green shoots for Europe. While the region is in a period of “significant transition,” according to Aneeka Gupta, director of macroeconomic research at WisdomTree, the euro zone could see a recovery from next spring as political uncertainty ebbs.
“We anticipate a landscape characterized by lower interest rates, greater political intervention, a renewed emphasis on valuation, and diminished appeal for globally exposed sectors,” Gupta added.
For more on equity markets:
- Higher for Longer Is What Markets Need to Digest: Taking Stock
- M&A Watch Europe: Aviva Agrees 275p/Sh for Direct Line, L’Oreal
- US Stock Futures Rise
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--With assistance from Michael Msika and Jan-Patrick Barnert.
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