European Stocks Fall as Nestlé Shake-Up and Inflation Data Weigh
European stock markets declined on Tuesday as investors digested fresh inflation data and reacted to a sudden leadership change at food giant Nestlé.
The pan-European Stoxx 600 fell 1.5%. Germany’s DAX plunged 2.2%, the U.K.’s FTSE 100 dropped 0.9%, and France’s CAC 40 slipped 0.7%.
Nestlé Leadership Crisis Pressures Markets
The food and beverage sector was among the biggest losers. Nestlé shares fell 0.9% in Switzerland after the board dismissed CEO Laurent Freixe. The move followed an investigation into an undisclosed relationship with a subordinate that violated the company’s code of conduct.
Nestlé named Philipp Navratil, head of its Nespresso division, as the new CEO with immediate effect. The abrupt change adds pressure to a company already dealing with weak sales, share price declines, and last year’s dismissal of CEO Mark Schneider. Chairman Paul Bulcke has also announced plans to step down in 2026.
Eurozone Inflation Inches Higher
Investors also focused on Eurozone inflation, which edged up slightly in August. According to Eurostat, the headline consumer price index rose 2.1% year-on-year, up from 2.0% in July and in line with forecasts.
Analysts at Capital Economics said the small increase is unlikely to sway European Central Bank policymakers, who are expected to keep rates unchanged at their September 11 meeting.
Services inflation fell to 3.1% from 3.2% in July, marking the lowest since March 2022. Core inflation, which excludes food and energy, held steady at 2.3%.
Outlook for ECB Policy
The ECB is likely to keep rates on hold in the near term, though expectations differ on the longer outlook. Some analysts see potential rate cuts by late 2025 or early 2026 if inflation continues to undershoot the 2% target.
Other Market Movers
Kering shares gained after HSBC upgraded the Gucci parent to “buy” from “hold.” Partners Group also rose after reporting its first-half earnings.
