European stocks close sharply lower on recession fears

(RTTNews) – European stocks fell on Tuesday as fears of recession triggered a sell-off. Investors digested some weak economic data from the Eurozone and the Bank of England’s Financial Stability Report which showed that growth prospects have deteriorated.

Signs of a resurgence in COVID-19 cases in China have also heightened global growth concerns and offset signs of easing US-China tensions.

The sharp drop in oil prices weighed on energy stocks, contributing significantly to the weakness in European markets.

The outlook for the UK as well as global economies has deteriorated significantly, but domestic vulnerabilities that can amplify economic shocks remain broadly at pre-pandemic levels, the Bank’s Financial Policy Committee said on Tuesday. from England.

The sharp rise in energy and other commodity prices has exacerbated inflationary pressures stemming from the pandemic and further disruption to supply chains, the bank said in its financial stability report.

The pan-European Stoxx 600 index fell 2.11%. Britain’s FTSE 100 fell 2.86%, Germany’s DAX fell 2.91% and France’s CAC 40 fell 2.68%, while the Swiss SMI ended down 1.65%.

Among other European markets, Austria, Belgium, Czech Republic, Finland, Greece, Ireland, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Turkey recorded significant to moderate losses.

Denmark fell slightly. Russia closed higher, while Iceland ended flat.

In the UK market, Harbor Energy fell nearly 10%. Rolls-Royce Holdings, Shell, Anglo American Plc, Glencore, BP, Antofagasta and Centrica plunged 7-9%.

Fresnillo and Entain lost 6.7% and 6.5% respectively. Aviva, Prudential, Barclays, Standard Chartered, M&G, Associated British Foods, IAG, Natwest Group, Rio Tinto and Melrose Industries fell 4-6%.

Dechra Pharmaceuticals rebounded 5.3% after RBC upgraded shares of the British veterinary products company to “outperform”.

Segro, Croda International Group and Ocado Group gained 2.6 to 3.5%. Spriax-Sarco Engineering, RightMove, Halma, Sainsbury J and 3I Group also ended sharply higher.

On the French market, Faurecia and Atos both ended down more than 8%. AXA, Valeo, Veolia, Thales, Renault, Publicis Groupe, WorldLine, Société Générale, Air Liquide, ArcelorMittal, Airbus Group, Air France-KLM and Vinci fell by 4 to 7%.

Crédit Agricole, Michelin, Bouygues, Carrefour, BNP Paribas, LVMH, STMicroElectronics and Safran lost 2 to 4%.

In Germany, MTU Aero Engines fell nearly 8%. Munich RE, BASF, HeidelbergCement, Continental, Zalando, Covestro, Volkswagen, Daimler, Porsche Automobil, Allianz and Deutsche Bank lost 4-7%.

Siemens, Bayer, Infineon Technologies, Fresenius, BMW and Siemens Healthineers also fell sharply.

Sartorius climbed almost 3%. Merck gained around 1.5%.

In economic news, the eurozone private sector grew at a slower pace in June, with manufacturing output registering its first decline in two years on the one hand and weaker growth in business activity services on the other, according to the final results of the S&P Global survey.

The final composite index of production fell to 52.0 in June, from 54.8 the previous month. The reading was slightly higher than the original estimate of 51.9. The score signaled the slowest pace of expansion in the current 16-month growth streak.

The Services PMI fell to 53.0 in June from 56.1 in May. The flash score was 52.8. Although the reading reported the weakest growth since January, the sector maintained its recovery.

The German private sector lost further momentum in June. The final S&P Global/BME composite production index fell to 51.3 in June, as estimated, from 53.7 in May. The latest score was the lowest since the split contraction seen last December.

The services PMI hit a five-month low of 52.4 in June from 55.0 in May. The final score corresponded to the flash estimate.

France’s private sector grew at the slowest pace in 14 months in June. The final composite index of production recorded 52.5 in June, well below 57.0 in May and the flash score of 52.8.

The services PMI slipped to 53.9 in June from 58.3 in May. The flash reading was 54.4.

French industrial production remained unchanged in May, after falling in the previous three months, according to data published by the statistical office Insee.

Industrial production showed no change in May, after a revised decline of 0.3% in April. At the same time, economists were expecting a rebound of 0.2%. Manufacturing production recovered by 0.8% per month in a, after falling by 0.% the previous month.

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