European stocks slide as relief rally falters; EDF up 15% following the acquisition of the State

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LONDON — European stocks fell slightly on Tuesday as the relief rally seen in the previous two sessions lost momentum.

The pan-European Stoxx 600 index slid 0.3% in early trading, with tech stocks shedding 1.2% to lead the losses while healthcare stocks added 0.8%.

The European blue chip index gained 0.8% during Monday’s trading session, building on gains from late last week amid broadly positive global sentiment.

However, several analysts expressed skepticism about the sustainability of the recovery, given the lack of fundamental drivers and lingering worries about growth and inflation.

This week, all eyes will be on the European Central Bank’s policy meeting in Frankfurt on Thursday, as policymakers preannounced a first hike in 11 years but faced slowing growth amid war in Ukraine and the resulting threats to energy supplies.

A final printout of eurozone inflation for June is due at 10am London time, along with construction production figures for May.

The earnings season is also accelerating. Novartis, Ubisoft, Remy Cointreau, Vinci, Telenor, Assa Abloy, Swedbank and Finnair were among those reporting before the bell on Tuesday.

In terms of individual stock price movement, French utility EDF jumped more than 15% after confirmation that the French government will pay 9.7 billion euros ($9.9 billion) to take full control of the company.

At the bottom of the index, Swedish medical technology company Getinge fell more than 7% after reporting its second quarter results.

Political instability has also returned to the fore, with the British Conservative Party leadership race entering its fourth round of MPs as the remaining candidates seek to succeed Prime Minister Boris Johnson.

Meanwhile, Italian Prime Minister Mario Draghi had his resignation rejected last week by President Sergio Mattarella, after he offered to step down when one of the parties in his coalition government boycotted a confidence vote in a new far-reaching political package.

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