Our website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

European shares end week lower on recession fears

by Staff GBAF Publications Ltd
0 comment

By Anisha Sircar and Shreyashi Sanyal

(Reuters) -European shares fell on Friday and posted a weekly loss as the highest-ever jump in German producer prices in July added to gloom over the economic outlook for the region’s biggest economy and rekindled fears of a recession.

The pan-European STOXX 600 ended 0.8% lower, with travel stocks leading the declines.

Rising energy prices due to the Ukraine war pushed German producer costs in July to their highest ever increases both year-on-year and month-on-month. Energy prices as a whole jumped 105%, compared with July 2021.

Germany’s DAX lost 1.1%, falling the most among its continental peers, and its 10-year yields rose to their highest in four weeks. [GVD/EUR]

The benchmark index is set to end the week about 1% weaker as investors weigh weak economic data, the impact of tighter monetary policy, fears of spiralling inflation and shrinking economies across the region. It gained more than 1% last week.

“European markets appear to have run out of puff this week, spooked in some part perhaps by the big jumps in inflation we’ve seen in UK CPI this week, as well as this morning’s eye-watering surge in German PPI for July,” said Michael Hewson, chief market analyst at CMC Markets UK.

Money markets are raising bets on European Central Bank hikes, moving to fully price in a 50 basis point (bps) rise in September, compared to the 50% chance of such a move priced in early August. They are also pricing in a small probability of a 75 bps move at the meeting. [GVD/EUR]

“The European Central Bank is going to have to keep raising rates, because otherwise people will begin to question their credibility even further… We’re likely going to see a hike of the same size as they have already done, but whether there would be a more aggressive move is anyone’s guess, since they are walking such a tightrope,” said Danni Hewson, financial analyst at AJ Bell.

French catering and food services group Sodexo fell 1.3% after Jefferies cut the stock to “hold” from “buy” to factor in a cautious recessionary scenario over fiscal year 2023-2024.

Just Eat Takeaway.com surged 25.8% to top the STOXX 600 after agreeing to sell 33% stake in Brazil’s iFood to technology investor Prosus for up to 1.8 billion euros ($1.8 billion). Prosus shares dripped 1.3%.

FLSmidth jumped 9.8% after raising its annual sales outlook as the mining equipment and cement maker beat second-quarter earnings forecasts.

(Reporting by Anisha Sircar and Shreyashi Sanyal in Bengaluru; Editing by Uttaresh.V, Sriraj Kalluvila and Mike Harrison)