|
The
pan-European STOXX 600 index fell 0.9%, with banks the worst
hit.
Deutsche Bank and Commerzbank fell 9.8% and 8.4%, respectively,
after an undisclosed investor sold stakes of more than 5% in
Germany's top lenders.
Appetite for shares was further dented as U.S. yields continued
to surge ahead of inflation data that is expected to show
consumer prices in the world's largest economy rose the most in
four decades.
After a strong rebound from March lows, the STOXX 600 has been
stuck in a range on worries about the fallout of the Ukraine
war, aggressive rate hikes by the Federal Reserve to tame
inflation and rising coronavirus cases in China.
"We're certainly in an economic slowdown and company earnings
growth rates will also slow," said Christian Stocker, equity
strategist at Italian bank UniCredit.
"While we have high inflation, company margins are pretty stable
at the moment. Equities are somewhat of a hedge in the current
inflationary environment so I'm not overly concerned."
Stocker warned that there are risks of a 5% selloff in European
equities but overall earnings should be supportive.
U.S. quarterly earnings season is set to begin this week with
Wall Street banks. In Europe, the reporting season will kick
into high gear later this month, with analysts' predicting a
19.9% rise in profit for STOXX 600 companies, as per Refinitiv
data.
China-exposed luxury stocks such as LVMH, Kering and Hermes
dropped in the range of 1% and 2% as China faced its worst
COVID-19 outbreak in two years.
Oil & gas stocks stayed afloat as crude prices rose after
falling below $100 a barrel in the previous session. [O/R]
Italian defence group Leonardo rose 3.5% as Deutsche Bank
upgraded the stock to "buy" on expectations of higher defence
spending in the company's main markets.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Arun
Koyyur)
[© 2022 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
