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

Energy stocks drag European shares lower, reversing earlier gains

Stock Markets Aug 01, 2022 12:06PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, July 29, 2022. REUTERS/Staff

By Bansari Mayur Kamdar and Anisha Sircar

(Reuters) - European shares edged down on Monday, dragged lower by energy stocks amid fears of a global economic slowdown fanned by disappointing Chinese economic data and figures showing contraction in euro zone manufacturing activity.

The pan-European STOXX 600 slipped 0.1% after a choppy trading day, reversing slim earlier gains.

Factories across the United States, Europe and Asia struggled for momentum in July as flagging global demand and China's COVID-19 restrictions slowed production, surveys showed, fanning fears of a recession.

Energy stocks shed 1.5%, snapping six straight days of gains, as crude prices dropped sharply after the weak factory data renewed demand concerns. [O/R]

Meanwhile, euro zone unemployment was steady at 6.6% of the workforce in June, the European Union's statistics office said, in line with market expectations.

"The labour market will remain tight even as the economy heads into recession, maintaining the upward pressure on wage growth and inflation," said Jack Allen-Reynolds, senior Europe economist at Capital Economics.

"We expect (pay growth) to pick up further as workers facing record inflation push for bigger wage increases. That will add to the cost pressures facing companies, which in turn is likely to keep consumer price inflation strong next year."

European stocks posted their best monthly performance on Friday since November 2020 helped by strong earnings from corporate Europe, even as broader sentiment remained fragile.

"The picture being painted is looking increasingly bleak for the EU, and a drill down of the numbers shows lower sales, declining rates of new orders and exports, and large rises in stocks," said Stuart Cole, head macro economist at Equiti Capital.

"The expectation has to be that manufacturers will be cutting output further going forward."

In Germany, the powerhouse of the European economy, data showed retailers ended the first half of 2022 with the sharpest year-on-year sales drop in nearly three decades, as inflation, the Ukraine conflict and the pandemic take their toll.

Heineken (OTC:HEINY) NV slipped 0.4% as the world's second-largest brewer shelved its margin target for 2023 as costs spiked.

Pearson jumped 12.7% to top the benchmark index after the British education group reiterated its full-year profit outlook.

Other boosts came from banking stocks after London-listed HSBC jumped 6.1% on a profit beat and prospects for chunkier dividends.

Europe's largest bank also pushed back on a proposal by top shareholder Ping An Insurance Group Co of China to split the lender, arguing the move would be costly.

Graphic: Germany's DAX and Italy's FTSE MIB underperform European peers - https://fingfx.thomsonreuters.com/gfx/mkt/egpbkxzadvq/EuropeDAX.PNG

Energy stocks drag European shares lower, reversing earlier gains
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other 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, don’t trash it.

  •           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. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. 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