European stocks hit 2-month lows on inflation worries

European stocks hit 2-month lows on inflation worries
© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, September 29, 2021. REUTERS/Staff

By Sruthi Shankar and Shreyashi Sanyal

(Reuters) -European stocks slumped to their lowest in two months on Friday, as warnings from companies and factory activity data highlighted the economic headwinds from supply-chain constraints and elevated prices.

The Europe-wide index fell 0.4% in a weak start to October, which has traditionally been a rough month for equities, with technology, miners and banks leading broad declines. The STOXX 600 ended the week with declines of 2.2%.

Online electricals retailer AO World Plc tumbled 24.3%, saying a shortage of delivery drivers in Britain and other disruptions in the global supply chain hit revenue growth in the first half of the year.

Meanwhile, a survey showed euro zone manufacturing growth remained strong in September but activity took a big hit from supply chain bottlenecks that are likely to persist and keep inflationary pressures high.

“Just because it appears the ECB will maintain its policy for the foreseeable future, doesn’t mean that higher inflation should be ignored,” said David Madden, market analyst at Equiti Capital.

Underwhelming figures from Asian factories and overnight losses on Wall Street dented the global mood as investors awaited a report that is expected to show euro zone inflation surged to a 13-year high. [GVD/EUR]

With government bond yields surging to multi-month highs and concerns about inflation coming to the fore, the benchmark STOXX 600 closed September 3.4% lower in its worst monthly showing in almost a year.

“For equities, this combination of slowing growth – albeit at a high level of demand – rising inflation and higher bond yields has meant slightly higher volatility, lower market returns and a rotation beneath the surface,” Goldman Sachs (NYSE:) strategist Sharon Bell said in a note.

“It hasn’t helped that earnings revisions have also started to slow from their frenetic pace earlier in the year.”

BofA Global Research cut its outlook for European stocks, predicting a decline of nearly 10% by year-end given a shift in the macro backdrop towards “anti-goldilocks”, where slowing growth is accompanied by higher discount rates.

BMW AG rose 1.3% after lifting its annual profit margin forecast as higher prices for new and used vehicles outweighed the effect of supply-chain issues.

French state-owned utility EDF (PA:) and energy group Engie rose 5.9% and 2.5%, respectively, with traders pointing to relief that electricity tariffs were untouched by the government in its plan to check further price rises.

France’s biggest telecoms group Orange fell 0.8% after it said it would buy insurer Groupama’s 21.7% stake in Orange Bank, its online banking unit.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Read More

Spread the love
Nicholas ‘Nick’ Statman entered the property industry in 2001 and set up a property buying company that quickly established itself as one of the biggest in the sector. During this time the Company successfully transacted on thousands of residential properties across the UK. Nicholas Statman was an early pioneer of the ‘quick sale’ niche market which has since grown considerably with a multitude of companies now operating in the sector. Nicholas Statman has strategically built a sizeable residential and commercial property portfolio with a view to holding for optimum capital growth and a long term passive income. Nicholas Statman has been involved in almost every aspect of the property sector over a 20 year period – this includes buying and selling, development, letting and management and is now involved in the fast growing online/ hybrid Estate Agent industry.

Latest articles

AI Monitoring Helps Marriott Hotels to Slash Food Waste

Marriott Hotels has significantly reduced its food waste by utilizing artificial intelligence (AI) monitoring technology from Winnow Vision...

Taiba Investments and Hilton to Introduce Madinah’s First Waldorf...

Taiba Investments will renovate the existing Taiba Front Hotel, rebranding it as Waldorf Astoria Al Madinah...

Unleash Your Leadership Potential: How Emotional Intelligence Elevates Success

While strategic thinking and technical expertise are essential, it's emotional intelligence (EI) that truly distinguishes great leaders from the rest...

Four Seasons Hotel Las Vegas Unveils Spectacular 2024 Race...

As F1 returns to Las Vegas for its grand finale, the Hotel will present an exceptional lineup of artistic and culinary experiences, ensuring that every moment of the race is infused with elegance and flair...

Similar articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Subscribe to our newsletter

Spread the love