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Inflation fears stemming from the broader global markets are weighing heavy on European stock markets. Other world’s markets are also falling.
European stock markets fell, as global markets continued to weather high inflation, slowing growth and rising rates. The Stoxx 600 dropped by 0.9% in early trading, with banks shedding 1.9% to lead losses. In fact, almost all sectors and major stocks were in negative territory. However, utilities was a notable exception, climbing 0.7%. Also, the European blue-chip index finished September down 3.4%, which ended a seven-month winning streak.
Furthermore, Asia-Pacific shares took a hit during Friday’s trade, as Japan’s Nikkei 225 dropped over 2.5% to lead losses. Mainland Chinese and Hong Kong markets were closed to mark public holidays.
In the United States, US futures experienced a wave of opening losses on Wall Street in early premarket trading. This comes after the S&P 500 suffered its worst month since March 2020 – a year and a half ago. Constant fears stemming from persistently high inflation, slowing growths, and rising rates are continually roiling global markets.
In the US meanwhile, core personal consumption expenditures price index – the Federal Reserve’s preferred policy-guiding metric – projects to rise 0.2% in August. It is also expected to rise by 3.5% annually.
Eurozone finance ministers will converge on Monday to deliberate on the economic fallout stemming from surging energy prices. The discussions are happening amid concern that they could impact the bloc’s recovery and also disproportionately affect the most economically vulnerable.
Other Occurring Developments within the European Stock Markets
In Germany, the conservative CDU-CSU bloc will hold coalition talks with the liberal Free Democrats (FDP) on Sunday. This is according to a Reuters report on Thursday which cites sources from the CDU-CSU. In last weekend’s federal elections, the conservative bloc marginally lost out to the center-left Social Democratic Party (SDP). However, both parties are seeking alliances with other parties to form a coalition government.
With regards to data, German retail sales climbed 1.1%, month-on-month in August, according to official figures released on Friday. These figures slightly fall short of a Reuters consensus forecast of 1.5%.
On the corporate front, automakers BMW (ETR: BMW) raised their annual profit forecast from between 7% to 9% to between 9.5% to 10.5%. The German car company revealed this new development in an ad hoc statement on Thursday. In addition, BMW said that higher prices negated the effects of the global semiconductor shortage and other supply chain problems.
British sportswear retailer JD Sports, dropped by 4.4% to the bottom of the Stoxx 600. This happened after the UK’s competition regulator launched a probe into the company and professional soccer club, Leicester City Football Club.
Ruling the index is French utility EDF. It climbed 3.7% after French Prime Minister Jean Castex announced on Thursday that February’s electricity price increase would receive a 4% cap.