European Stocks Close Notably Lower On Growth Worries, Rate Concerns

(RTTNews) - European stocks closed notably lower on Tuesday as investors digested the latest batch of economic data and earnings announcements, and looked ahead to the policy moves by the Federal Reserve and the European Central Bank.

Concerns about potential interest rate hikes and the likely impact on economic growth weighed on stocks.

The Fed is expected to raise its benchmark interest rate by 25 basis points on Wednesday despite signs of an impending slowdown.

Fed chief Jerome Powell's post-decision press conference will be closely watched for comments around the future of monetary policy.

The ECB is widely expected to raise rates for a seventh straight meeting on Thursday and the big question is whether it will be a 25 or 50 bps rate hike.

The pan European Stoxx 600 lost 1.24%. Germany's DAX ended 1.23% down, France's CAC 40 dropped 1.45% and the U.K.'s FTSE 100 shed 1.24%, while Switzerland's SMI edged down 0.12%.

Among other markets in Europe, Austria, Belgium, Denmark, Finland, Iceland, Ireland, Netherlands, Norway, Russia, Spain, Sweden and Turkiye ended with sharp to moderate losses.

Poland ended marginally up, while Czech Republic and Greece closed slightly weak.

In the UK market, Pearson plunged 15% after US-listed firm Chegg warned that students were using ChatGPT instead of its services.

BP tumbled 8.6% after slowing the pace of share buybacks. Relx fell 5.1% and Shell lost 4.47%. Barclays, Anglo American Plc, Standard Chartered, Rio Tinto, Scottish Mortgage, Vodafone Group, Informa, Next and Segro lost 2 to 4%.

HSBC Holdings climbed 3.5% after tripling its quarterly profit. Persimmon rallied more than 5.5%. Sainsbury (J) surged 2.53%. Ashtead Group climbed about 2% up on share buyback news.

Entain, Berkeley Group Holdings, IHG, Barratt Developments and Auto Trader Group gained 1 to 2%.

In Paris, TotalEnergies tumbled 5%. Vinci, Unibail Rodamco, Kering, Sanofi, BNP Paribas, AXA, Saint Gobain, Renault, Societe Generale, Stellantis, Orange, Carrefour, Safrain and Airbus ended lower by 1.4 to 3%.

In the German market, Vonovia, Covestro, Bayer and Commerzbank lost more than 4%. Zalando, BASF, Deutsche Bank, Fresenius, Fresenius Medical Care, Deutsche Telekom, Puma, Merck, Hannover Rueck and RWE lost 1.4 to 4%.

Infineon Technologies gained nearly 2% and Siemens Energy climbed 1.6%.

On the economic front, Eurozone inflation rose slightly in April on food and non-energy industrial goods prices, while core inflation slowed marginally, flash data from Eurostat showed. The harmonized inflation of consumer prices posted an annual growth of 7% in April, following a 6.9% rise in March. The rate came in line with economists' expectations.

Euro area manufacturing activity contracted for the tenth straight month in April with the latest fall being the biggest since May 2020 on declining production and orders, final data from S&P Global and Hamburg Commercial Bank showed.

The HCOB factory Purchasing Managers' Index dropped to 45.8 in April from 47.3 in March. Nonetheless, the reading was slightly above the flash of 45.5.

Germany's retail sales decreased by a real 2.4% on a monthly basis in March, after a 0.3% drop in February, data from Destatis showed. Economists had expected a rebound of 0.4%.

On a yearly basis, retail sales fell 6.5% in March versus a 5.8% decline in February. The expected decrase was 6.1%.

The British manufacturing sector contracted further at the start of the second quarter, as output and new orders fell amid headwinds of client uncertainty, destocking, and tightening cost controls, survey results from S&P Global revealed Tuesday.

The Chartered Institute of Procurement & Supply manufacturing Purchasing Managers' Index, or PMI, edged down to 47.8 in April from 47.9 in March. The flash estimate was 46.6.

The PMI reading has remained below the neutral 50.0 for the ninth successive month.

UK house prices rose unexpectedly in April after posting seven consecutive declines suggesting that the housing market is stabilizing after the mini-budget shattered financial markets last year. House prices posted an annual fall of 2.7%, which was slower than the 3.1% decrease in March, the Nationwide Building Society said.