European Stocks Close Notably Lower As Interest Rate Concerns Resurface

European stocks closed notably lower on Monday as last week's data showing stronger than expected jobs growth in the U.S. raised concerns the Federal Reserve will continue to hold rates at higher levels for longer than earlier thought.

Geopolitical tensions after the U.S. military shot down a suspected Chinese spy balloon off the California coast on Saturday weighed as well.

Investors also digested the latest batch of economic data from the region, and corporate earnings announcements.

The pan European Stoxx 600 drifted down 0.78%. The U.K.'s FTSE 100 declined 0.82%, Germany's DAX ended 0.84% down, and France's CAC 40 ended lower by 1.34%, while Switzerland's SMI closed 0.58% down.

Among other markets in Europe, Austria, Belgium, Finland, Ireland, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Turkiye ended weak.

Denmark, Iceland and Russia closed higher, while Czech Republic and Greece ended flat.

In the UK market, Prudential tumbled 4.76%. Ocado Group, Hargreaves Lansdown, BT Group, Land Securities, Next, Informat, Scottish Mortgage, Persimmon, Melrose Industries and B&M European Value Retail lost 2 to 3.4%.

Airtel Africa rallied more than 3.5%. Centrica, GSK and Fresnillo gained 1.3 to 1.8%.

In the German market, Zalando ended 5.6% down. Porsche, Adidas, Puma, Cov3stro, Siemens Energy, Siements Healthineers, Vonovia, BASF, Infineon Technologies, Deutsche Bank and Deutsche post ended lower by 1.5 to 3.6%.

Aurubis shares plunged nearly 5%. The German copper producer reported that its first quarter net income dropped 81% to 57 million euros from 301 million euros in the same quarter last year.

Bayer climbed more than 2.5% and Sartorius surged nearly 2%, while Fresenius Medical Care, RWE and Muich RE posted modest gains.

In Paris, ArcelorMittal dropped 3.7% and Kering ended 3.4% down. Alstom, Publicis Groupe, STMicroElectronics, Hermes International and Saint Gobain lost 2 to 3%.

Finnish stock Rovio Entertainment climbed nearly 15%. The creators of mobile game Angry Birds, announced the commencement a strategic review and preliminary non-binding talks with certain parties regarding a potential tender offer.

In economic news, Germany's factory orders recovered at the end of the year 2022, but the rebound was driven by a huge growth in the big-ticket orders, suggesting a weaker contribution to the economic growth going forward.

Factory orders grew 3.2% on a monthly basis in December, partially offsetting the revised 4.4% decline in November, data published by the statistical office Destatis revealed. Orders were forecast to climb moderately by 2%.

Germany's construction sector continued to contract in January as high prices and rising interest rates weigh on demand, survey results from S&P Global showed. The construction Purchasing Managers' Index rose to 43.3 in January from 41.7 in the previous month.

Data publiched by Eurostat showed Eurozone retail sales declined at the fastest pace in twenty months after rebounding in the previous month, as rising price pressures weighed on household spending.

Retail sales fell 2.7% month-on-month in December, in contrast to the 1.2% increase in November, which was revised up from 1.8%. Economists had expected a 2.5% drop for the month.

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