(Reuters) – European stocks finished lower on Monday as Britain’s export-heavy FTSE index tumbled due to a stronger pound, while selling in defensive sectors such as healthcare and utilities dented early gains in markets.

After rising as much as 0.2% after a surprise rise in German exports and hopes of stimulus from the European Central Bank later this week, the pan-European STOXX 600 index gave up gains as the day wore on.

The index closed down 0.3%, ending a three-day run of gains, as internationally focused shares of the FTSE 100 .FTSE dropped 0.6% following gains for the pound on optimism that Britain will not crash out of the European Union without a deal.

However, investors were mostly looking ahead to the ECB’s policy meeting on Thursday, when the central bank is expected to introduce a new wave of monetary stimulus.

Europe’s banking index .SX7P, the worst performer this year among major subsectors, rose 2.2% to hit more than a one-month high.

The index has recovered from near 8-year lows hit in mid-August amid a broad recovery on hopes of a resolution to the U.S.-China trade dispute and in the past weeks, as investors tempered expectations of aggressive easing measures from the ECB.

“Rhetoric from ECB speakers suggests that markets may be overestimating the size of a QE package and the ECB may underwhelm on the size of asset purchases, while simultaneously cutting front-end rates,” Morgan Stanley analysts wrote in a client note.

“For economies where the financing is largely provided by the banking system, a steeper curve helps to facilitate the provision of credit. In order to stimulate growth, the ECB is unlikely to be pleased with another reversal.”

Banking-heavy indexes of Milan .FTMIB and Madrid .IBEX rose about 0.2%, with Santander’s shares (SAN.MC) gaining 2.4% after the Spanish bank said it would raise its ownership of its Mexican business to 91.65% from 74.96% after a stock exchange offer.

Automakers .SXAP, meanwhile, jumped 2% after upbeat German export data in July, while dimming chances of a no-deal Brexit helped Germany’s carmakers, whose key destination is Britain.

Also helping Frankfurt-listed shares .GDAXI close 0.3% higher, a report said Germany was considering the creation of a “shadow budget” that would enable Berlin to boost public investment beyond the restrictions of constitutionally enshrined debt rules, sources told Reuters.

On the other end, shares of defensive sectors including healthcare .SXDP, food and beverage .SX3P and utilities .SX6P, which have enjoyed a strong run-up this year, fell about 1.7%, weighing on the STOXX 600.

Shares in Air France (AIRF.PA) slid 10% to the bottom of the index after disappointing August numbers, while IAG (ICAG.L) fell 1.5% as British Airways pilots began a 48-hour strike. Together, the stocks drove the travel and leisure sector .SXTP down 0.5%.

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