Stock investors scout out Europe’s rate-cut winners

MILAN/LONDON, June 7 (Reuters) – Investors in European equities are stepping up their search for stocks that are likely to benefit from lower borrowing costs, after the European Central Bank’s (ECB) first interest-rate cut in almost five years.

While the cut was expected, analysts see the move as a potential turning point for beaten-down sectors like utilities and small caps, and even highly shorted stocks, which have suffered as rates have risen and stayed high. Banks, which have been some of the biggest beneficiaries of policy tightening, could instead be in for profit-taking.