By Peter Nurse
Investing.com - European stock markets weakened Friday, continuing the global selloff with hawkish comments from Fed policymakers pointing to imminent interest rate hikes, while strong growth data helped the U.K. market outperform.
At 4:10 AM ET (0910 GMT), the DAX in Germany traded 0.7% lower, the CAC 40 in France dropped 0.8% and the U.K.’s FTSE 100 fell 0.2%.
The U.K. economy grew by a much stronger-than-expected 0.9% in November, with the world’s fifth-largest economy finally growing above its size just before the country went into its first Covid-19 lockdown in February 2020.
This positive news helped the FTSE 100 outperform its main European peers, but despite November's growth acceleration, the country’s GDP probably took a hit in December when the Omicron coronavirus variant first arrived in force.
Still, the overall tone in Europe is negative with Germany, the region’s growth driver, reporting Thursday another record of more than 81,000 Covid-19 infections in a day, Hungary announcing plans to make a fourth Covid shot available as cases soar, and the French Senate approving the government's latest measures to tackle the virus, including a controversial vaccine pass.
The main indices on Wall Street closed sharply lower Thursday and Asia followed suit as hawkish comments from a number of Federal Reserve policy makers pointed to early interest rate hikes in the U.S., the largest economy in the world.
Federal Reserve Governor Lael Brainard became the latest U.S. central banker, during her confirmation hearing before the Senate Banking Committee, to state that interest rates will have to rise to combat sky-high inflation.
In corporate news, Electricite de France (PA:EDF) stock slumped over 20% after the energy giant issued a massive profit warning late Thursday, saying new measures by the French government to cap retail electricity prices will hit it hard in 2022. Problems at its reactors also led it to cut its output forecast by nearly 10%. Elsewhere in energy markets, benchmark gas futures in north-west Europe jumped 10% as talks between the U.S. and Russia over Ukraine broke down, followed by a widespread cyberattack on Ukrainian government websites.
SAP (DE:SAPG) stock rose 1.3% after the German business software group said fourth-quarter revenue from its cloud computing business jumped 28% as more customers shifted their IT operations to its cloud business database.
Experian (OTC:EXPGF) stock fell 1.7% despite the world's largest credit data firm reporting on Friday a 14% jump in its third-quarter revenue as robust demand in North America compensated for weakness in its Europe, Middle East and Africa markets.
Assicurazioni Generali (MI:GASI) stock rose 0.5% after Europe’s third-insurer announced that director Francesco Caltagirone has resigned from the board amid a boardroom disagreement regarding the reappointment of CEO Philippe Donnet.
Oil prices pushed higher Friday and are still on course to end the week higher for the fourth consecutive week on the back of a tight supply market and a drop in U.S. crude inventories to 2018 lows.
By 3:45 AM ET, U.S. crude futures traded 0.8% higher at $82.75 a barrel, while the Brent contract rose 1% to $85.29.
Additionally, gold futures rose 0.3% to $1,826.15/oz, while EUR/USD traded 0.2% higher at 1.1473.