European stocks fell on Wednesday as traders turned their attention to economic data that offered signals on the likely path for eurozone interest rates.

Europe’s region-wide Stoxx 600 lost 0.2 per cent at the market open, reversing gains from the previous session, while France’s Cac 40 lost 0.3 per cent.

Germany’s Dax was down 0.1 per cent after data showed that industrial production in the eurozone’s largest economy rose 0.3 per cent in April, rebounding from the previous month’s contraction but missing economists’ expectations of a 0.6 per cent rise. 

The moves come a day after a European Central Bank survey showed that consumers were steadily lowering their expectations for inflation in the eurozone. Data is being closely watched by traders ahead of an ECB meeting next week, in which it is expected to raise interest rates from the current level of 3.25 per cent, to ward off lingering inflation.

Annual consumer prices in the 20-country single currency bloc rose 6.1 per cent in the year to May, declining from 7 per cent in April, but investors expect they will remain too high to convince policymakers to stop raising rates.

“While the ECB would welcome the drop in inflation expectations, its job is far from done”, said Mohit Kumar, chief Europe financial economist at Jefferies.

US futures were down, with contracts tracking Wall Street’s benchmark S&P 500 and those tracking the tech-heavy Nasdaq 100 falling 0.1 per cent ahead of the New York open. 

Both indices rallied in the previous session, with the S&P 500 gaining 0.2 per cent and the Nasdaq Composite adding 0.4 per cent, as investors hoped that the US would cease the ascent of interest rates, which boosted valuations. The S&P has risen by nearly a fifth so far this year.

Asian equities were mixed with Hong Kong’s Hang Seng index adding 0.7 per cent but Japan’s Topix fell 1.3 per cent.

China’s CSI 300 lost 0.5 per cent, after data showed that Chinese exports contracted more than expected in May, in a further dent to the country’s hopes for a strong economic rebound from the Covid-19 pandemic.

Exports contracted 7.5 per cent compared with the same period a year earlier, well behind the forecast of analysts polled by Reuters, who expected a contraction of 0.4 per cent.

In Turkey, the lira tumbled as much as 7 per cent in London trading on Wednesday, to a new record low of 23.2 against the dollar.