Sonova slumps as sluggish European stocks make little progress – Reuters

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* Sonova slumps after missing financial targets

* Renewed prospect of U.S. rate hike impacts equities

* Goldman Sachs cuts equities to “neutral”

By Sudip Kar-Gupta

LONDON, May 18 European stock markets dipped
lower on Wednesday, weighed down by renewed expectations of U.S.
interest rate rises this year, and some weak corporate earnings.

The pan-European FTSEurofirst 300 index declined by
0.2 percent, while the euro zone’s blue-chip Euro STOXX 50 index
fell 0.4 percent.

Swiss hearing aid maker Sonova was among the
worst-performing stocks in Europe, slumping 8.3 percent after
missing its full-year sales and profit targets.

On Tuesday, data showed that U.S. consumer prices recorded
their biggest increase in more than three years in April,
pointing to a steady inflation build-up that could give the
Federal Reserve ammunition to raise interest rates later this
year.

A U.S. Federal Reserve policymaker also said he would push
for an interest rate hike in June or July while two others still
saw up to three rate increases this year, leaving the door open
to a change in monetary policy relatively soon.

“The spectre of a U.S. rate hike is leading to a bit more
cautious sentiment and negativity creeping into the stock
markets,” said Hantec Markets’ analyst Richard Perry.

Investment bank Goldman Sachs also cut its view on global
equities, downgrading the asset class to “neutral”.

“Until we see sustained earnings growth, equities do not
look attractive, especially on a risk-adjusted basis,” Goldman
Sachs wrote in a note.

The FTSEurofirst is down by around 9 percent so far in 2016,
with concerns about a China-led global economic slowdown having
impacted world stock markets this year.

Today’s European research round-up

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Mike Dolan, Markets Editor EMEA.

(Editing by Andrew Heavens)