Please try another search
© Reuters.
By Peter Nurse
Investing.com - European stock markets weakened sharply Wednesday on concerns that high inflation, fed by increasing energy costs, will force central banks to tighten monetary policy faster, choking off the post-pandemic recovery.
At 3:40 AM ET (0740 GMT), the DAX in Germany traded 1.8% lower, the CAC 40 in France fell 1.7% and the U.K.’s FTSE 100 dropped 1.3%.
German factory orders, a normally reliable leading indicator of trends in Europe's largest economy, set the negative tone with a shock 7.7% decline in August, a sharp slowdown from the 4.9% gain in July. The slump was caused largely by the key automotive sector, which has repeatedly flagged problems with its supply chain this year.
European investors had already received a weak handover from Asia, after New Zealand's central bank hiked interest rates by for the first time in seven years in an attempt to get on top of inflationary pressures, and signalled further tightening was to come. In Europe, Romania had become the latest emerging country to hike on Tuesday and Poland is expected to follow suit on Thursday.
Energy markets continue to create headaches for industry, with U.K. gas prices hitting a new all-time high of 330 pence a therm, around 97 euros a megawatt-hour.
Oil also traded at multi-year highs amid global concerns about energy supply, particularly after the so-called OPEC+ bloc decided against speeding up a pre-agreed pace of output increases.
By 3:40 AM ET, U.S. crude futures traded 0.4% higher at $79.28 a barrel, having earlier climbed to its highest level since November 2014. The Brent contract rose 2% to $82.91, after rising to a three-year high in the previous session.
In corporate news, Tesco (OTC:TSCDY) stock soared 4.8% after the U.K. supermarket chain raised its full-year outlook as it reported a 16.6% rise in first-half core retail profit. It also announced a share buyback, with the first tranche of 500 million pounds in shares to be bought by October 2022.
Bayer (DE:BAYGN) outperformed, holding steady after a judge ruled that its Roundup weedkiller wasn't the cause of a boy's rare form of cancer - a welcome win in a series of largely unsuccesful legal battles over the product.
On the flip side, Tui (DE:TUIGn) stock fell 0.9% after the travel company said it would raise 1.1 billion euros ($1.27 billion) in equity to help pay down its pandemic debt.
Additionally, gold futures fell 0.6% to $1,749.65/oz, while EUR/USD traded 0.2% lower at 1.1574.
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.
I feel that this comment is:
Thank You!
Your report has been sent to our moderators for review
Add a Comment
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.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.