logo
  

European Stocks Plunge Sharply On Geopolitical Worries, Monetary Tightening Fears

European stocks crashed on Monday, extending recent losses and suffering the worst setback in nearly 20 months, as mounting geopolitical tensions and worries about imminent monetary tightening by central banks, including the Fed, triggering widespread selling.

Some disappointing economic data and reports showing continued spikes in coronavirus cases in several countries across the world weighed as well on the markets.

The Fed is scheduled to begin a two-day meeting on Tuesday, with the latest monetary policy decision due Wednesday afternoon.

While the Fed is likely to leave interest rates unchanged, the accompanying statement could hint at the first rate hike as early as the next meeting in mid-March.

The pan European Stoxx 600 plunged 3.8%. The U.K.'s FTSE 100 declined 2.63%, Germany's DAX tumbled 3.74%, France's CAC 40 fell 3.97% and Switzerland's SMI shed 3.84%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Poland, Portugal, Russia, Spain, Sweden and Turkey tumbled 1.7 to 5.1%.

Pearson, Barratt Developments, Scottish Mortgage, Evraz and Polymetal International tumbled 7 to 9%.

IAG, Antofagasta, Berkeley Group Holdings, Pershing Square Holdings, Persimmon, Anglo American Plc, Aveva Group, Rolls-Royce Holdings, Prudential, Royal Mail and Mondi lost 5 to 6.5%.

Unilever Group shares climbed 7.3% on reports that activist investor Nelson Peltz has built a stake in the consumer goods company.

Vodafone Group gained 4.5% on reports that the group was in talks with Iliad to combine their operations in Italy. British American Tobacco moved up nearly 1.5%.

In the German market, HelloFresh plunged more than 7%. Infineon Technologies, Porsche Automobil, Deutsche Bank, Volkswagen, HeidelbergCement, Sartorius, Symrise and Continental shed 4 to 6%.

BMW, Deutsche Post, SAP, Zalando, BASF, Adidas, MTU Aero Engines, Allianz, Bayer and RWE also declined sharply.

In Paris, Capgemini, WorldLine, ArcelorMittal, Societe Generale, Publicis Groupe, Safran, STMicroElectronics, Airbus Group, Unibail Rodamco and Dassault Systemes lost 4 to 7%.

Renault, BNP Paribas, Credit Agricole, Bouygues, Pernod Ricard, Saint Gobain, Sanofi and Sodexo also ended sharply lower. Orange climbed 1.7%.

In economic news, Eurozone private sector growth eased in January as the Omicron variant hit the services activity, flash survey results from IHS Markit showed.

The flash composite output index slid to an 11-month low of 52.4 in January, from 53.3 in December. The score was forecast to fall to 52.6.

British business activity cooled unexpectedly this month to an 11-month low as the Omicron variant continued to weigh on customer-facing parts of the economy, flash survey results from IHS Markit showed on Monday.

The Chartered Institute of Procurement & Supply flash composite output index fell to 53.4 in January from 53.6 in December.

Germany's private sector rebounded in January, led by a stronger performance from the manufacturing sector, flash survey results from IHS Markit showed on Monday.

The flash composite output index rose unexpectedly to 54.3 in January from 49.9 in December. The score was forecast to fall to 49.2. A score above 50 indicates expansion.

The manufacturing Purchasing Managers' Index improved to 60.5 in January from 57.4 in the previous month. The expected level was 57.0.

At 52.2, the services PMI was up from 48.7 in December. Nonetheless, this was the second-lowest level in the past nine months and above economists' forecast of 48.0.

France private sector grew at the slowest pace in nine months in January, flash survey results from IHS Markit showed. The flash composite output index fell more-than-expected to 52.7 in January from 55.8 in December. The expected reading was 54.5.

The services Purchasing Managers' Index came in at 53.1 in January, down from 57.0 in December and the economists' forecast of 55.3. The manufacturing PMI dropped only slightly to 55.5 from 55.6 in the previous month. The reading matched expectations.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Follow RTT