October 6, 2022

European stocks skid on gloomy business activity data, commodity weakness

Read Time:2 Minute, 20 Second


The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, June 22, 2022. REUTERS/Staff

Register now for FREE unlimited access to Reuters.com

  • STOXX 600 on pace to confirm bear market
  • European miners at six-month lows
  • Aroundtown slumps after JPMorgan downgrade
  • Norway central bank hikes by 50 bps

June 23 (Reuters) – European shares dropped on Thursday after a survey showed euro zone business activity slowed significantly in June, adding to fears of a sharp economic downturn, while sliding oil and metal prices hit commodity-linked stocks.

The continent-wide STOXX 600 index (.STOXX) dropped 1%, with miners (.SXPP) shedding 2.6% to hit an over six-month low as copper and other metals extended recent declines on growing fears about a recession.

Economically sensitive sectors including banks and automakers fell nearly 2%, while oil & gas stocks (.SXEP) slipped 1.0%.

Register now for FREE unlimited access to Reuters.com

An S&P Global survey showed euro zone business growth slowed significantly this month, and by much more than expected, as consumers concerned about soaring bills opted to stay at home and defer purchases to save money. read more

“European assets will remain under stress until inflation recedes, and global growth momentum reaccelerates,” BCA Research analysts wrote in a note.

“While the ECB has ratcheted up its hawkish rhetoric and will do whatever it takes to overcome inflationary pressures, this will be a headwind to an already brittle economy.”

The European Central Bank (ECB) will likely raise its deposit rate above zero for the first time in a decade in September, according to most economists polled by Reuters. read more

Adding to the downbeat mood, Federal Reserve Chair Jerome Powell said on Wednesday the U.S. central bank is not trying to engineer a recession to stop inflation but it is fully committed to bringing prices under control even if doing so risks an economic downturn. read more

Norway’s central bank raised its benchmark interest rate by 50 basis points on Thursday, its largest single hike since 2002. read more

The benchmark STOXX 600 has shed nearly 19% since hitting a record closing high on Jan. 5, with the session’s losses putting it close to confirming a bear market, or 20%, decline from a recent peak.

Germany’s DAX (.GDAXI), France CAC 40 (.FCHI) and Italy’s FTSE MIB (.FTMIC) are all in a bear market.

German real estate group Aroundtown (AT1.DE) tanked 9.1% after J.P. Morgan downgraded the stock to “underweight”, while telecoms towers group Vantage Towers (VTWRn.DE) dropped 4.6% after Morgan Stanley cut its rating to “equal-weight”.

Register now for FREE unlimited access to Reuters.com

Reporting by Sruthi Shankar in Bengaluru; Editing by Rashmi Aich

Our Standards: The Thomson Reuters Trust Principles.



Source link

Happy
Happy
0 %
Sad
Sad
0 %
Excited
Excited
0 %
Sleepy
Sleepy
0 %
Angry
Angry
0 %
Surprise
Surprise
0 %
Previous post With 9.76% CAGR, In-Flight Entertainment & Connectivity
Next post Fidelity FTEC ETF: June Technology Dashboard