- STOXX 600 ends 0.6% down
- Healthcare, tech stocks weigh
- ADP drops as Royal Schiphol Group sells stake
Dec 6 (Reuters) - European shares fell on Tuesday, dragged down by weakness in healthcare and rate-sensitive tech stocks, with investors concerned about a global economic slowdown in the run-up to a raft of major central bank decisions.
The region-wide STOXX 600 index (.STOXX) closed 0.6% lower, extending losses for a third day, as optimism around China easing its COVID-19 restrictions was overshadowed by worries around interest rates and the likelihood of recession.
The European Central Bank, U.S. Federal Reserve and Bank of England all meet next week to discuss monetary policy. The Reserve Bank of Australia offered a glimpse of decisions to come after raising rates to a 10-year high and sticking with its projection that more hikes are needed to cool inflation.
"We are again seeing global recession fears rise," said Stuart Cole, head macro economist at Equiti Capital.
"With equities, specifically, there's also a realization that a lot of corporates were far too optimistic and the cost of living crisis is really going to curtail aggregate consumption going forward."
The pan-European STOXX 600 index has rallied off its October lows on hopes that signs of cooling inflation would allow the Fed to slow the pace of its rapid interest rate increases in the world's largest economy.
However, those hopes were dented on Monday after a report showed an unexpected pick-up in U.S. services industry activity in November, which, along with solid labour data last week, provided further evidence of economic resilience.
"(The services data) slightly disturbed the narrative of a slowdown or pivot," said Russ Mould, investment director at AJ Bell.
The European Central Bank will have to raise rates several more times to tame price pressures, even if headline inflation is now close to its peak, ECB chief economist Philip Lane told the Milano Finanza.
Elsewhere, ECB Governing Council member Constantinos Herodotou told a Bloomberg event that euro zone rates will rise again, but are very near their "neutral level".
Rate-sensitive information technology stocks (.SX8P) slid 1.6%, extending losses for their third straight session and weighing on the STOXX 600.
The healthcare sector (.SXDP) lost 1.2% and was the biggest drag on the index.
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