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European Stocks Close Lower On Growth Worries

European stocks closed sharply lower on Thursday, weighed down by weak U.S. economic data and hawkish comments from Fed officials.

Investors continued to focus on the ongoing World Economic Forum in Davos, Switzerland.

The pan European Stoxx 600 fell 1.55%. The U.K.'s FTSE 100 ended 1.07% down, Germany's DAX dropped 1.72% and France's CAC 40 drifted down 1.86%, while Switzerland's SMI lost 0.95%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Russia, Spain and Sweden all ended weak, while Turkiye bucked the trend and closed higher.

In the UK market, Ocado Group plunged more than 7% and Persimmon dropped about 5.5%. Hargreaves Lansdown, Antofagasta, Berkeley Group Holdings, Taylor Wimpey, Ashtead Group, Scottish Mortgage, Airtel Africa, Kingfisher, ABRDN and Barratt Developments lost 3 to 4.5%.

Rolls-Royce Holdings, Melrose Industries, Johnson Matthey, Rentokil Initial, Barclays, Fresnillo and BP also ended sharply lower.

Entain, Severn Trent, Beazley, United Utilities, Hiscox, British American Tobacco, Imperial Brands, Flutter Entertainment and Pearson gained 1 to 2.5%.

In the German market, Continental tumbled more than 5%. Zalando, Vonovia, Infineon Technologies, Adidas, Deutsche Post, Covestro, Siemens, Mercedes-Benz Group, SAP and Siemens Energy lost 2 to 4%.

In Paris, Schneider Electric, STMicroElectronics, ArcelorMittal, Eurofins Scientific, Alstom, LVMH, Capgemini, Hermes International, Saint Gobain, Essilor, Kering and Stellantis shed 2.5 to 4%.

Thales climbed more than 2%. Pernod Ricard surged nearly 2%. Danone ended modestly higher.

In economic news, the European Central Bank is set to continue its interest rate hikes for some time ahead, the minutes of the latest policy session in December revealed.

Many policymakers had sought a jumbo raise of 75 basis points due to the prospect of inflation staying high for too long, but eventually agreed on a smaller half basis point lift in a bid to have more room for higher rates in the future.

Speaking at the World Economic Forum in Davos, Switzerland, ECB President Christine Lagarde said the central bank was determined to continue with interest rate hikes to bring inflation to target.

"Inflation, by all accounts, is way too high," the ECB chief said.

"There is determination at the ECB to bring inflation back in a timely manner and we should stay the course with high interest rates until we have been in restrictive territory for long enough to bring it down," Lagarde said.

UK house prices declined sharply towards the end of the year amid rising interest rates and fears of a recession, data from the Royal Institution of Chartered Surveyors, or RICS, revealed Thursday.

Switzerland's producer and import prices increased 3.2% year-on-year in December, data from the Federal Statistical Office showed.

The producer price index climbed 2.6% annually in December, and import prices grew 4.4%. Compared to the previous month, producer and import prices declined 0.7% in December.

In 2022, the producer and import prices advanced 5.6% from 2.7% in 2021.

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