European stocks fell on Tuesday, with French shares erasing some of the previous session’s gains on relief over the first round of parliamentary elections, while investors awaited euro zone inflation data for guidance on the path of ECB interest rates.
The pan-European STOXX 600 index slipped 0.5% at 704 GMT, hitting a two-week low.
France’s CAC 40 index fell 0.6%. It had risen 1.1% on Monday after investors were relieved by a victory for Marine Le Pen’s National Rally (RN), which was smaller than some polls had predicted, reducing the far-right party’s chances of an absolute majority.
Later in the day, investors will focus on eurozone inflation data for June. Economists expect inflation to fall slightly from the previous month.
German inflation fell more than expected in June, data showed Monday, resuming its downward trend after two consecutive months of increases and leaving the door open for another rate cut by the European Central Bank in September.
However, ECB President Christine Lagarde said on Monday that benign economic developments indicated that rate cuts were not urgent.
Among individual stocks, Sodexo fell about 4% after the French caterer reported lower-than-expected third-quarter sales, citing the slowdown in China.
Siemens Energy rose 2.3% after the power engineering group said it plans to hire more than 10,000 employees by 2030. (Reporting by Sruthi Shankar in Bengaluru and Jesus Calero in Gdansk; Editing by Rashmi Aich)
