European Markets Settle Sharply Lower As Rate Hikes By Central Banks Fuel Recession Fears

RTTNews | 982 dagar sedan
European Markets Settle Sharply Lower As Rate Hikes By Central Banks Fuel Recession Fears

(RTTNews) - European stocks plunged sharply on Thursday, weighed down by concerns that the Federal Reserve's decision to hike interest rates by 75 basis points, and the fifth consecutive rate hike by the Bank of England might trigger a recession in the foreseeable future.

Earlier in the day, the Swiss National Bank unexpectedly increased interest rates for the first time since 2007. The SNB signaled that more tightening in future is possible.

The BoE's Monetary Policy Committee, led by Governor Andrew Bailey, voted 6-3 to raise the bank rate by 25 basis points to 1.25%, which is the highest since early 2009. The central bank has raised the bank rate by a total 1.15 percentage points since December.

The MPC forecast consumer price inflation to be over 9% during the next few months and to rise to slightly above 11% in October. The increase in October would reflect higher projected household energy prices, the bank said.

The latest projection was above BoE's May forecast, when the bank estimated inflation to peak over 10% at the end of 2022.

Inflation shot up to a 40-year high of 9% in April from 7% in the previous month, putting a severe squeeze on household income.

The U.S. Federal Reserve on Wednesday raised the target rate for the federal funds rate by a larger-than-expected 75 basis points to 1.75%, which was the biggest rate hike since 1994.

The European Central Bank last week announced its intention to hike the rate by a quarter point in July.

The pan European Stoxx 600 shed 2.47%. The U.K.'s FTSE 100 ended 3.14% down, Germany's DAX tumbled 3.31% and France's CAC 40 drifted down 2.39%, while Switzerland's SMI declined 2.86%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Portugal, Spain, Sweden and Turkey all ended sharply lower. Russia bucked the trend and moved up sharply.

Automakers drifted lower after industry data showed European passenger car registrations declined for the tenth successive month in May, but at a slower pace.

In the UK market, Persimmon tanked 12%. Scottish Mortgage, ICP, JD Sports Fashion, IAG and RS Group lost 7 to 9%.

ITV, Whitbread, Ocado Group, Glencore, Shell, Prudential, Antofagasta, BP, Smiths Group, Natwest Group, M&G, Melrose Industries, Barclays and Lloyds Banking Group ended lower by 4 to 7%.

British fashion retailer ASOS plunged more than 30% and rival Boohoo slumped 11.8% after both reported slowing sales.

London Stock Exchange climbed 2.3%, Segro advanced 1.3% and Informa gained about 1%.

In the French market, Atos, Engie, Renault, Air France-KLM, Saint Gobain, STMicroElectronics, Faurecia, ArcelorMittal, Valeo, Airbus Group, Publicis Groupe and Kering shed 3 to 8%.

In Germany, Zalando tumbled more than 12% amid concerns about falling sales growth. Covestro and HelloFresh lost about 8.6% and 7.4%, respectively. BASF, E.ON, Infineon Technologies, Deutsche Wohnen, Brenntag, Siemens, Sartorius and BMW lost 3 to 7%.

European passenger car registrations declined for the tenth successive month in May, but at a slower pace, data from the European Automobile Manufacturers' Association (ACEA) showed.

Passenger car sales fell 11.2% year-over-year in May, following a 20.6% decrease in April. Sales totaled 791,546 units in May.

Car sales in all four key EU markets logged double-digit losses during the month, the Brussels-based ACEA said.

read more
TSX Ends Sharply Lower On Mixed Economic Data, Weak Commodities

TSX Ends Sharply Lower On Mixed Economic Data, Weak Commodities

The Canadian market ended sharply lower on Friday due to heavy selling in technology, materials and energy sectors. Consumer discretionary and financials stocks too reeled under pressure, albeit to a less pronounced extent.
RTTNews | 23h 55minuter sedan
Dollar Rises, Gains Against Major Counterparts

Dollar Rises, Gains Against Major Counterparts

The U.S. dollar climbed higher on Friday, scoring gains over most of its major counterparts, after weak consumer sentiment data prompted investors to shun riskier assets such as equities.
RTTNews | 1 dag sedan
Swiss Market Ends On Buoyant Note

Swiss Market Ends On Buoyant Note

The Switzerland market started off on a flat note on Friday, but gained in strength as the day progressed with stocks from across several sectors finding good support.
RTTNews | 1 dag sedan
U.S. Dollar Higher Amid Risk Aversion

U.S. Dollar Higher Amid Risk Aversion

The U.S. dollar advanced against its major counterparts in the New York session on Friday amid risk aversion, as U.S. stocks pulled back after weak consumer sentiment data.
RTTNews | 1 dag sedan
Major European Markets Close On Mixed Note

Major European Markets Close On Mixed Note

European stocks closed on a mixed note on Friday with investors largely making cautious moves, digesting regional PMI data, and a slew of corporate earnings announcements, in addition to closely following the developments on the geopolitical front. Uncertainty about U.S. government's trade and economic stance weighed on stocks. Germany's snap election on Sunday was in focus as well.
RTTNews | 1 dag sedan
Canadian Markets Remains In Negative Territory; Energy, Materials Shares Decline

Canadian Markets Remains In Negative Territory; Energy, Materials Shares Decline

After opening slightly up, the Canadian market tumbled into negative territory Friday morning as tariff threats and weak commodity prices, as well a few disappointing earnings updates prompted investors to press sales at several counters. Preliminary data showing a likely drop in retail sales in January is weighing as well.
RTTNews | 1 dag sedan
U.S. Consumer Sentiment Plunges To Lowest Level Since November 2023

U.S. Consumer Sentiment Plunges To Lowest Level Since November 2023

A report released by the University of Michigan on Friday showed consumer sentiment in the U.S. deteriorated by much more than previously estimated in the month of February. The University of Michigan said its consumer sentiment index for February was downwardly revised to 64.7 from a preliminary reading of 67.8. Economists had expected the index to be unrevised.
RTTNews | 1 dag sedan
U.S. Existing Home Sales Pull Back Sharply In January

U.S. Existing Home Sales Pull Back Sharply In January

Existing home sales pulled back sharply in the month of January, according to a report released by the National Association of Realtors on Friday. NAR said existing home sales plunged by 4.9 percent to an annual rate of 4.08 million in January after surging by 2.9 percent to an upwardly revised rate of 4.29 million in December.
RTTNews | 1 dag sedan