European stocks open to close as recession fears continue

European stocks open to close as recession fears continue

LONDON – European stocks were lower on Thursday as global markets see renewed volatility after a brief recovery following last week’s tumultuous trading.

The pan-European Stoxx 600 fell 0.5% by late morning, having recovered more than half of its earlier losses. Banks fell 1.5%, while travel and leisure stocks gained 1.1%.

Looking at individual stock price movement, Aroundtown fell more than 7% to the bottom of the European blue-chip index after JPMorgan downgraded the property company’s stock to “underweight” and lowered its price target. .

At the top of the index, French IT company Atos jumped more than 10% after a French media report said the government would support a possible merger with compatriot aerospace firm Thales.

European stocks closed lower on Wednesday, reversing gains made in previous sessions as global volatility continued and market sentiment shifted to a more negative environment amid fears over rising inflation and a slowdown. of economic growth.

“Faced with challenges such as rising material and energy costs, industrial companies in Europe continue to struggle with restricted revenue and operational challenges.”

Thomas Rinn

Global industry leader, Accenture

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

Powell told Congress on Wednesday that the central bank is “firmly committed” to reducing inflation after the rate hit a 40-year high in the United States. He also noted that a recession is a “possibility,” a fear that continues to weigh on Wall Street.

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

On the data front in Europe, preliminary estimates of PMI (purchasing managers’ index) readings from France and Germany for June were weaker than expected, adding to recession fears.

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

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

Thomas Rinn, global industrial leader at Accenture, said the weak readings showed the “uphill battle” facing the euro zone’s manufacturing sector.

“Faced with challenges such as rising material and energy costs, industrial companies in Europe continue to struggle with restricted revenue and operational challenges,” Rinn said.

“Although there are signs of a recovery in order numbers, it appears that inflationary pressures are here to stay, and European manufacturers should prepare accordingly.”

Separately, Norway’s central bank on Thursday announced a surprise 50 basis point hike in its benchmark interest rate, the country’s biggest single hike since 2002.

The move brings the policy rate from 0.75% to 1.25%, with Norges Bank Governor Ida Wolden Bache saying in a statement that it will likely be raised to 1.5% in August.

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