European shares continued their downward trend, making it a fourth day in a row. The day started off on a high, as the latest news from the U.S. Federal Reserve brought some excitement to the market, but that quickly waned, before a fall in crude oil prices took its toll. The Pan-European STOXX 600 index fell by 1 percent, though it managed to avoid a five-week intraday low. Fed official Lael Brainard had said in the morning that the Fed should continue supporting the U.S. economy, causing the Pan-European index to move up by 0.6 percent. Crude prices came down on the back of concerns over inconsistent supply, bringing the sector index lower by 2.8 percent. There were indications last week that the Fed might increase rates in September, but those were washed away by Brainard’s comments. Investors are also worried about the activity of the European Central Bank (ECB). The prevalent thought was that the ECB might restrict stimulus measures, which caused investors to sell equities and bonds.
So far, Europe has provided no clear evidence of improved economic conditions, which is a mounting sentiment amongst investors and wealth managers. This was made worse by the declaration of Italy’s economic minister that the country would be reducing its growth estimates. However, some Citigroup strategists believe Italian stocks are still worth buying. The Prime Minister, Matteo Renzi, could garner some support at the conclusion of the upcoming referendum. Favoured Italian stocks are Campari and Autogrill. Meanwhile, the sharpest drop for the day was Ocado’s 13.7 percent dive. The British online supermarket said the fall in grocery prices would last longer than expected and the competition in the region was still growing. On the positive side, Swiss company Partners Group, was up 8.4 percent for a record high.