European Stocks Settle Lower Again On Recession Fears

(RTTNews) - European stocks fell on Tuesday, extending recent losses, amid rising concerns that aggressive monetary policy tightening by central banks could push the global economy into a recession.

Data from the Labor Department on Friday showed the U.S. consumer price index rose 8.6% in May, sharply higher than the expected increase, raising concerns the Fed will likely hike interest rate by 50 to 75 basis points on Wednesday.

The Bank of England and the Bank of Japan, which are also due to announce their policies this week, are also expected to tighten their stance to rein in inflation.

The Bank of England is seen raising interest rates by a modest 25 basis points on Thursday despite Monday's data showing a contraction in the country's GDP in April.

Investors also remained concerned about a surge in coronavirus cases in China and the resultant fresh restrictions in several places in the country.

The pan European Stoxx 600 ended 1.26% down. Germany's DAX fell 0.91%, France's CAC 40 drifted down 1.2% and the U.K.'s FTSE 100 shed 0.25%, while Switzerland's SMI declined 1.81%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Greece, Iceland, Ireland, Netherlands, Portugal, Spain and Sweden drifted lower.

Norway, Poland and Russia closed higher, while Finland and Turkey settled flat.

In the UK market, Ocado Group tanked nearly 11%. Kingfisher, Rentokil Initial, Ashtead Group, SSE, Auto Trader Group, Croda International Plc, ICP, Halma, Endeavour Mining, Relx, National Grid, Informa, WPP and Diageo shed 2 to 4.5%.

Standard Chartered and HSBC Holdings both gained about 3.5%. Barratt Developments, Harbour Energy, Taylor Wimpey, Rolls-Royce Holdings and BP gained 2 to 2.5%.

In the French market, Atos plunged nearly 25% on news of restructuring and CEO exit. Air France-KLM ended more than 13% down and WorldLine shed about 7.3%.

Legrand, Saint Gobain, Pernod Ricard, Michelin, Veolia, Teleperformance, L'Oreal, Capgemini and Valeo declined 2 to 4.3%.

Carrefour, BNP Paribas and AXA gained 1.2 to 1.6%.

In Germany, HelloFresh plummeted more than 7%. Zalando ended lower by about 6%, while Sartorius, Symrise, Qiagen, Adidas, Covestro, E.ON, Merck, Infineon Technologies, Siemens and RWE lost 2 to 4%.

Vonovia rallied nearly 2.5%. Deutsche Boerse and Deutsche Post also ended notably higher.

In economic releases, German consumer price inflation rose to 7.9% in May from 7.4% in April, final data from Destatis showed. The rate came in line with the flash estimate published on May 30.

Another report from Destatis showed that wholesale prices logged a strong double-digit growth of 22.9% annually after rising 23.8% in April.

Germany's economic confidence improved in June but remained negative as the economy faces uncertainties posed by the war in Ukraine and the tightening of monetary policy, survey results from the ZEW - Leibniz Centre for European Economic Research showed.

The ZEW Indicator of Economic Sentiment climbed to a four-month high of minus 28.0 points in June from -34.3 in May. The reading was forecast to rise to -27.5.

The U.K. jobless rate rose in May as the number of people claiming unemployment benefits fell by less than expected, despite continued gains in overall employment levels.

The Office for National Statistics said that the claimant count fell by 19,700, while the jobless rate rose to 3.8% of the population.

The jobless rate fell 0.2 percentage points to 3.8% in three months to April but remained above the expected 3.6%.