Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

European Stocks Sharply Lower; U.K. GDP Slumps in April

Stock Markets Jun 13, 2022 10:16
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Peter Nurse

Investing.com - European stock markets traded lower Monday, with weak UK growth data raising fears of an economic slowdown in the region just as central banks move to address red-hot inflation.

By 3:50 AM ET (0750 GMT), the DAX in Germany traded 1.4% lower, the CAC 40 in France fell 1.5%, and the UK’s FTSE 100 dropped 0.9%.

Data released earlier Monday showed that the UK economy contracted in April, with gross domestic product falling by 0.3% as the manufacturing, services, and construction sectors all declined simultaneously for the first time since January 2021.

This slowdown in growth comes ahead of Thursday’s Bank of England policy-setting meeting at which the central bank is widely expected to deliver what will be its fifth consecutive 25 bps rate hike since December after UK inflation hit a four-year high of 9% in April.

Europe had already received a weak handover from Asia, with Japan’s Nikkei, South Korea’s KOSPI and the Hang Seng in Hong Kong all falling around 3%, as investors digested the largest year-on-year increase in the US consumer price index since December 1981, data showed on Friday.

This hit hopes that US inflation had peaked and raised the chances that the Federal Reserve, which meets later in the week, will continue its aggressive monetary tightening past the 50 basis point hikes already largely priced in for June and July.

This follows the European Central Bank confirming late last week that it intends to hike interest rates by 25 basis points in July, with another rate increase also expected in September.

Adding to the market’s woes was Sunday’s news of a “ferocious” COVID-19 outbreak in Beijing's most populous district of Chaoyang.

In corporate news, Sanofi (NASDAQ:SNY) stock fell 0.8% despite the French drugmaker saying the COVID-19 vaccine candidate it has developed jointly with GSK (LON:GSK) in two trials showed a potential to protect against the virus's main variants of concern when used as a booster jab.

Oil prices slipped Monday as a burst of new COVID-19 cases in Beijing, China’s capital city, thwarted hopes of a rapid increase in demand from the world’s largest crude importer.

Also weighing on the price of crude is the prospect of further US monetary tightening to combat surging inflation, boosting the dollar and potentially causing a sharp economic slowdown.

By 3:50 AM ET, US crude futures traded 1.8% lower at $118.56 a barrel, while the Brent contract fell 1.7% to $119.95.

Additionally, gold futures fell 0.8% to $1,859.95/oz, while EUR/USD traded 0.5% lower at 1.0463.

European Stocks Sharply Lower; U.K. GDP Slumps in April
 

Related Articles

AIG Reports Q2 EPS Beat, Delays its Unit IPO Plans
AIG Reports Q2 EPS Beat, Delays its Unit IPO Plans By Investing.com - Aug 08, 2022

AIG (NYSE:AIG) reported its Q2 results, with EPS of $1.19 coming in better than the consensus estimate of $1.07. General Insurance combined ratio of 87.4% improved by 510 basis...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email