European shares close lower as tech weighs

The pan-European STOXX 600 index closed 0.2% lower, snapping a three-day winning streak

Europe's STOXX 600 closed slightly lower on Monday as losses in heavyweight technology shares weighed on the index, while the focus remained on the U.S. Fed, which is widely expected to start its policy easing cycle this week.

The pan-European STOXX 600 index closed 0.2% lower, snapping a three-day winning streak.

Europe's tech index slipped 1.2%, the biggest percentage decliner amongst major STOXX sectors, following its near 5% rise last week.

Retail led advances with a 0.9% increase, boosted by a 3.1% rise in H&M.

Focus will be on the U.S. central bank's interest rate decision on Wednesday, with money markets pricing in a 61% probability of a 50 bp rate cut, and a total easing of 120 basis points this year.

With the Federal Reserve set to hop aboard the rate cut bandwagon, a global easing cycle should be a tailwind for equities after the ECB opted to cut rates for the second time in three months, wrote analysts at Glenmede led by Jason Pride, chief of investment strategy & research.

Momentum behind global easing cycles has historically been a bullish signal for equities in the short-to-medium term, they added.

Central bank rate decisions in Norway and the UK will also be on investors' radar this week.

The European Central Bank's chief economist Philip Lane said the bank should keep reducing interest rates gradually, but its policymakers expressed differing views on how to signal their intent given economic uncertainty.

Among individual movers, France's Rexel climbed 9.1% after the Paris-listed group rebuffed an around $9.4 billion acquisition offer from billionaire Brad Jacobs-led QXO.

On the flip side, shares of Nestle weighed on the benchmark index with a 1% decline after Morgan Stanley cut the stock's rating to "underweight" and cut its target price.