by On Thursday, European shares were on their course for the worst quarter since the carnage that had occurred back in 2020 when the coronavirus pandemic had struck. This was after investors had become extremely wary of an economic recession globally due to the hawkish actions of global central banks for taming the surging inflation.
Indexes fall
The pan-European STOXX 600 index recorded a fall of 1.3%, which set it on course for a loss in this quarter of more than 10%. There was also a drop of 1.8% in the CAC 40 index in France, as preliminary figures indicated that there had been a rise in inflation to a whopping 6.5%, as opposed to the previous month.
Market analysts said that it was becoming apparent that inflation is serious and is becoming entrenched, which means that investors would now have to evaluate the values they have placed on equities. For a short while, European market participants had believed that inflation was mostly external, but this is changing. In the next couple of months, the European Central Bank would have to enhance its efforts of controlling inflation in the next couple of years.
This was a fall for the second consecutive day in the STOXX 600 after chiefs of global central banks had said that bringing down high inflation all over the world was going to be painful and could even result in a crash in economic growth.
New data expected
Investors are now focusing on the data due on Friday, which will show the initial estimates of inflation in the euro zone in the month of June. Meanwhile, the European Central Bank should scrutinize this data ahead of its policy meeting scheduled for July 21st in which the central bank has already promised to hike up the interest rates since 2011.
So far, the STOXX 600 has already recorded a 16% drop in the year, primarily because of a combination of worries from the slowdown in the Chinese economy to surging inflation and the Russian war in Ukraine that have all dampened risk appetite.
On Thursday, there was a decline recorded in all European indexes, with automobiles and technology falling by 2.3% and 2.1%, respectively.
Single stocks performance
In terms of individual stock performances, there was a 16.1% fall in Uniper SE, after Gazprom’s gas supply restrictions prompted the German utility to withdraw its outlook for the year. There was also a 5% drop in shares of Fortum, which is its parent company. A 3.1% fall was recorded in Industrie De Nora on the debut of the electrode maker in the Italian market.
A 2.7% rise was seen in BioNTech, after a $3.2 billion deal was signed by the company, along with Pfizer, with the US government for delivering 105 million doses of their vaccine. A 3.2% gain was also seen in British Bank Virgin Money after it announced a buyback of shares of about 75 million pounds. A 5.4% increase in Saab was also seen, as the defence materials group was able to secure an order from the Defense Material Administration in Sweden.
