European shares slide to over 1-1/2 year lows on slowdown fears


The graphic of the German share index DAX is pictured on September 21, 2022 at the Frankfurt Stock Exchange. REUTERS/Staff

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  • STOXX 600 hits February 2021 lows
  • The lead of tech and real estate stocks is shrinking
  • FTSE 100 down after 50bps hike from BoE
  • Sabadell jumps in on bids for the payments arm

September 22 (Reuters) – European stocks fell 1.8% on Thursday as recession fears mounted after the US Federal Reserve announced another gargantuan rate hike and signaled more in its fight against stubbornly high inflation.

The pan-European STOXX 600 index (.STOXX) hit its lowest level since February 2021, led by rate-sensitive technology stocks (.SX8P) and real estate stocks (.SX86P), each falling more than 4%, with the latter falling over 2%. yearly lows.

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The Fed announced more rate hikes after announcing its third 75 basis point hike of the year on Wednesday, and expressed less hope for a soft landing for the US economy. Continue reading

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Markets faced several central bank decisions this week, including hawkish moves from Sweden, Switzerland, the UK and intervention in Japan.

“(Thursday’s decline) is a follow-up to last night’s Federal Reserve meeting,” said Giles Coghlan, chief markets analyst at HYCM. “Markets are trying to digest all of central bank action over the past 24 hours.”

“Equity traders are seeing higher interest rates, not just in the US, but also in the UK and Europe. So there’s no reason for equity traders to be encouraged.”

European Central Bank executive board member Isabel Schnabel said interest rates must continue to rise as inflation is still far too high even as the euro zone faces an economic downturn. Continue reading

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The STOXX 600 posted its second consecutive month decline as Europe also grapples with an energy and livelihood crisis amid the Russia-Ukraine war that is hampering gas flows. Analysts are forecasting a deeper recession for the euro zone with possible power outages in the winter.

Data on Thursday showed that euro-zone consumer confidence fell a more-than-expected 3.8 points in September from August.

“We’re very bearish on eurozone stocks in the near term…because they have big risks related to energy and geopolitics over the winter,” said Xavier Chapard, strategist at La Banque Postale Asset Management.

London’s FTSE 100 index (.FTSE) fell 1.1% after the Bank of England hiked interest rates by 50 basis points and said it would continue to target inflation “as needed” despite the economy entering recession react.

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Travel & Leisure (.SXTP) stocks fell 3.2%, while French hotel group Accor (ACCP.PA) fell 6.9% after JPMorgan was downgraded to underweight on profitability concerns.

Spanish bank Sabadell (SABE.MC) rose 5.0% after receiving indicative bids from France’s Worldline (WLN.PA), Italy’s Nexi (NEXII.MI) and US firm Fiserv (FISV.O) for had received their payment leg, which sources say was worth up to 400 million euros ($393.64 million). Continue reading

($1 = 1.0160 euros)

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Reporting by Shreyashi Sanyal, Johann M. Cherian and Susan Mathew in Bengaluru; Edited by Saumyadeb Chakrabarty and Lisa Shumaker

Our standards: The Thomson Reuters Trust Principles.



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