European shares subdued after hawkish remarks from ECB’s Lagarde

European shares were muted on Tuesday as gains in shares of luxury giants and financial firms on hopes of more policy stimulus from China were countered by hawkish comments from European Central Bank President Christine Lagarde.

The pan-European STOXX 600 index (.STOXX) was down 0.05% by 8:40 GMT, following six straight sessions of losses.

China’s Premier Li Qiang said the country’s economic growth in the second quarter would be higher than the first and was expected to reach the annual economic growth target of around 5%.

The comments brought some relief to investors concerned in recent days by smaller-than-expected rate cuts from China, political instability in Russia after a failed mutiny as well as a potentially protracted global interest rate hiking cycle.

“Markets are expecting either the data to improve from China or stimulus to increase from the government. But that good stimulus news is priced in and any sort of good news that I would need to see to send markets significantly higher in China would be some kind of positive domestic growth story,” said Giles Coghlan, chief market analyst at HYCM.

This report’s information was first seen on REUTERS; to read more, click this link.