European stocks close lower on growth and interest rate concerns

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European stocks closed lower on Thursday as investors closely watched developments on the geopolitical front and digested UK Finance Minister Jeremy Hunt’s budget announcement.

A rise in Covid-19 cases in China and hawkish comments from some Federal Reserve officials also weighed on investor sentiment.

The pan-European Stoxx 600 index fell 0.42%. Britain’s FTSE 100 edged down 0.06% and France’s CAC 40 lost 0.47%, while Germany’s DAX climbed 0.23%. The Swiss SMI ended down 0.17%.

Among others markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden and Turkey all finished weak.

UK Chancellor Jeremy Hunt today announced tax measures that would raise billions, spending cuts and cost-of-living support for households and businesses struggling with rising energy bills as he confirmed the economy is in recession.

The headline inflation rate is expected to be 9.1% this year and 7.4% next year, Hunt said in his fall statement, citing the latest Office for Budget Responsibility (OBR) projections. .

The OBR has downgraded UK growth projections from March, mainly due to soaring energy costs.

The UK economy is expected to grow by 4.2% this year, while output is expected to fall by 1.4% next year.

Thereafter, the GDP is expected to increase by 1.3% in 2024 and the growth rate is expected to reach 2.7% in 2026.

Unemployment is expected to rise from 3.6% currently to 4.9% in 2024 before falling back to 4.1%.

In the UK market, Ocado Group fell 8.6%. Harbor Energy was down almost 6%, Hargreaves Lansdown ended down 4.8% and Halma closed down around 4.3%.

Shares of Spirax-Sarco Engineering fell 3% after the niche thermal power and pumping specialist backed its full-year guidance for adjusted operating profit, excluding contributions from recent acquisitions.

Antofagasta, Anglo American Plc, Smurfit Kappa Group, Endeavor Mining, Dechra Pharmaceuticals, Scottish Mortgage, GSK, Coca-Cola HBC and CRH also ended sharply lower.

Centrica climbed nearly 5.5%. Lloyds Banking Group, Imperial Brands, Natwest Group, Legal & General, Burberry Group, British Land and 3I Group gained 2-3%.

In Paris, Bouygues plunged 7%. The French construction and media conglomerate confirmed its sales and profitability forecast for 2022 after announcing rising sales in the first nine months of the year.

However, net income group share fell to 537 million euros from 807 million euros last year.

Faurecia ended down around 3% and Michelin was down 2.4%, while Unibail Rodamco, Air Liquide, Valeo, Veolia, Vivendi, WorldLine, Thales and Teleperformance lost 1-2%.

Renault and Atos both earn nearly 2.5%. BNP Paribas and Societe Generale recorded modest gains.

In the German market, HelloFresh fell by more than 7%. Continental, Zalando, Merck, Puma, Daimler, HeidelbergCement, Vonovia, BASF and Fresenius Medical Care lost 1-4%.

Siemens jumped 6.5% after engineering and Technology The group said it expects higher margins on factory automation equipment and software products next year.

MTU Aero Engines increased by 4.2% and RWE by 1.8%. Symrise, Porsche Automobile and Volkswagen also finished sharply higher.

Final data from Eurostat showed that eurozone inflation accelerated further in October, albeit at a slightly slower pace than initially expected.

Annual inflation rose from 9.9% in September to 10.6% in October. In the same month last year, prices had risen only 4.1%.

Core inflation, which excludes energy, food, alcohol and tobacco, rose to 5% from 4.8% a month ago. The year-over-year increase matches the estimate published on October 31.

Construction output in the euro zone rose slightly after falling the previous month, according to Eurostat data. Production in the construction sector rose 0.1% month over month in September, reversing a revised 1% decline in August.

European stocks close lower on growth and interest rate concerns

European stocks closed lower on Thursday as investors closely watched developments on the geopolitical front and digested UK Finance Minister Jeremy Hunt’s budget announcement.

A rise in Covid-19 cases in China and hawkish comments from some Federal Reserve officials also weighed on investor sentiment.

The pan-European Stoxx 600 index fell 0.42%. Britain’s FTSE 100 edged down 0.06% and France’s CAC 40 lost 0.47%, while Germany’s DAX climbed 0.23%. The Swiss SMI ended down 0.17%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden and Turkey all finished weak.

UK Chancellor Jeremy Hunt today announced tax measures that would raise billions, spending cuts and cost-of-living support for households and businesses struggling with rising energy bills as he confirmed that the economy was in recession.

The headline inflation rate is expected to be 9.1% this year and 7.4% next year, Hunt said in his fall statement, citing the latest Office for Budget Responsibility (OBR) projections. .

The OBR has downgraded UK growth projections from March, mainly due to soaring energy costs.

The UK economy is expected to grow by 4.2% this year, while output is expected to fall by 1.4% next year.

Thereafter, the GDP is expected to increase by 1.3% in 2024 and the growth rate is expected to reach 2.7% in 2026.

Unemployment is expected to rise from 3.6% currently to 4.9% in 2024 before falling back to 4.1%.

In the UK market, Ocado Group fell 8.6%. Harbor Energy was down almost 6%, Hargreaves Lansdown ended down 4.8% and Halma closed down around 4.3%.

Shares of Spirax-Sarco Engineering fell 3% after the niche thermal power and pumping specialist backed its full-year guidance for adjusted operating profit, excluding contributions from recent acquisitions.

Antofagasta, Anglo American Plc, Smurfit Kappa Group, Endeavor Mining, Dechra Pharmaceuticals, Scottish Mortgage, GSK, Coca-Cola HBC and CRH also ended sharply lower.

Centrica climbed nearly 5.5%. Lloyds Banking Group, Imperial Brands, Natwest Group, Legal & General, Burberry Group, British Land and 3I Group gained 2-3%.

In Paris, Bouygues plunged 7%. The French construction and media conglomerate confirmed its sales and profitability forecast for 2022 after announcing rising sales in the first nine months of the year.

However, net income group share fell to 537 million euros from 807 million euros last year.

Faurecia ended down around 3% and Michelin was down 2.4%, while Unibail Rodamco, Air Liquide, Valeo, Veolia, Vivendi, WorldLine, Thales and Teleperformance lost 1-2%.

Renault and Atos both earn nearly 2.5%. BNP Paribas and Societe Generale recorded modest gains.

In the German market, HelloFresh fell by more than 7%. Continental, Zalando, Merck, Puma, Daimler, HeidelbergCement, Vonovia, BASF and Fresenius Medical Care lost 1-4%.

Siemens jumped 6.5% after the engineering and technology group said it expects higher margins on factory automation equipment and software products next year.

MTU Aero Engines increased by 4.2% and RWE by 1.8%. Symrise, Porsche Automobile and Volkswagen also finished sharply higher.

Final data from Eurostat showed that eurozone inflation accelerated further in October, albeit at a slightly slower pace than initially expected.

Annual inflation rose from 9.9% in September to 10.6% in October. In the same month last year, prices had risen only 4.1%.

Core inflation, which excludes energy, food, alcohol and tobacco, rose to 5% from 4.8% a month ago. The year-over-year increase matches the estimate published on October 31.

Construction output in the euro zone rose slightly after falling the previous month, according to Eurostat data. Production in the construction sector rose 0.1% month over month in September, reversing a revised 1% decline in August.

Concerns about the outlook for US interest rates in the coming months weighed on sentiment.

San Francisco Federal Reserve Chair Mary Daly said Wednesday that a hold on rate hikes was not on the cards at this time.

Federal Reserve Governor Christopher Waller said he would not make a final decision on tightening until the jobs data and consumer spending report are released.

In remarks at an event hosted by Greater Louisville Inc., St. Louis Fed President James Bullard suggested that the central bank’s aggressive interest rate hikes had ” only limited effects on observed inflation”.

Bullard said the Fed will have to keep raising interest rates to a level that could be considered “sufficiently restrictive.”

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