July 2, 2022

European stocks open their doors to close as recession fears persist

European stocks open their doors to close as recession fears persist

LONDON – European shares fell on Thursday, as global markets saw renewed volatility after a brief rebound in the wake of turbulent trading last week.

pan europe Stokes 600 It was down 0.5% late in the morning, having recouped more than half of its earlier losses. Banks fell 1.5 percent, while travel and leisure stocks rose 1.1 percent.

In terms of individual stock price movement, around the city It fell more than 7% to the bottom of the European benchmark index after JPMorgan downgraded the real estate company’s shares to “underweight” and lowered its price target.

At the head of the index is the French information technology company Atos It jumped more than 10% after French media reported that the government would support a possible merger with its country’s airline. Thales.

European shares closed lower on Wednesday, reversing the gains they made in previous sessions as global volatility continued and market sentiment turned more negative amid fears of rising inflation and slowing economic growth.

“Facing challenges such as increasing material and energy costs, industrial companies in Europe continue to struggle with revenue constraints and operational challenges.”

Thomas Rain

Global Industrial Lead, Accenture

US stock futures It fell early Thursday after major indexes slipped into the red at the end of regular trading and investors weighed the possibility of a recession following comments from Federal Reserve Chairman Jerome Powell.

Powell told Congress on Wednesday that the central bank is “strongly committed” to lowering inflation After the rate reached a 40-year high in the United States. He also noted that a recession is a “possibility” – a fear that has continued to weigh on Wall Street.

Meanwhile, in Asia-Pacific markets overnight, sentiment was more mixed as investors continued to monitor recession fears.

On the data front in Europe, there are flash estimates of the French and German PMI readings for June Came weaker than expectedAdding to recession fears.

The German Composite PMI, which captures manufacturing and services activity, fell to 52.0 from 54.8 in May, below analyst expectations of 54.0 in a Reuters poll. The composite reading for France came in at 52.8, down from 57.0 in May.

The broader euro zone PMI also fell significantly to 51.9 in June from 54.8 in May, with economists expecting a reading of 53.9.

Thomas Rehn, global manufacturing leader at Accenture, said the weak readings showed the “uphill battle” the eurozone manufacturing sector is facing.

“Faced with challenges such as increasing material and energy costs, industrial companies in Europe continue to struggle with revenue constraints and operational challenges,” said Rehn.

“Although there are signs of a pickup in order numbers, inflationary pressures appear to be here to stay, and European manufacturers should prepare accordingly.”

Elsewhere, Norway’s central bank announced a A sudden 50 basis point hike in the benchmark interest rate Thursday, the largest single increase in the country since 2002.

The move raises the interest rate from 0.75% to 1.25%, and Norway Bank Governor Ida Waldenbach said in a statement that it is likely to rise to 1.5% in August.