European stocks drop on inflation data, U.S. rate cuts hopes

The pan-European Stoxx 600 was last down by 0.1%, with most regional bourses and sectors pulling back

European stocks slipped on Monday as the first trading day in September kicked off and investors considered the outlook for markets.

The pan-European Stoxx 600 was last down by 0.1% at 7:05?am GMT, with most regional bourses and sectors pulling back. Mining stocks were last down 1.24%.

Shares in real estate listings firm Rightmove surged as much as 24% after its Australian rival REA Group said it was considering making an offer for the U.K.-based platform.

Regional markets closed up last Friday, the last trading day of August, as investors considered inflation data from around the world and expectations rise that the U.S. Fed will begin interest rate reductions in September.

Data released last week showed the Federal Reserve’s preferred inflation gauge, the personal consumption expenditures (PCE) price index, increased 0.2% on a monthly basis in July and 2.5% from a year ago. The result was in line with estimates from economists polled by Dow Jones. Excluding food and energy, it also increased 0.2% from the previous month. The data is likely to influence policymakers’ rate decision in September.

Asia-Pacific markets declined overnight as investors assessed China’s business activity figures released over the weekend. China’s official purchasing managers’ index (PMI) data for August saw the manufacturing PMI drop to a six-month low of 49.1, a faster contraction than the 49.4 seen in July.

Data releases in Europe on Monday include the latest manufacturing PMIs from Spain, Italy, France, U.K. and Germany. There are no major earnings releases.

U.S. markets are shut on Monday for the Labor Day public holiday.