European Stocks Close Lower On Growth Worries

(RTTNews) - European stocks closed lower on Thursday as investors continued to react to hotter-than-expected U.S. inflation data, which has raised expectations that the Fed might aggressively hike rates in the coming months.

Lingering worries about economic slowdown and further curbs on movements in several parts of China due to a surge in coronavirus cases weighed as well on the markets.

Markets also reacted to a report from the European Commission that downgraded the eurozone economic outlook and inflation projections, citing the shocks unleashed by the war in Ukraine, deceleration of growth in the US and the impact of strict zero-COVID policy in China.

The pan European Stoxx 600 ended 1.53% down. The U.K.'s FTSE 100 drifted down 1.63%, Germany's DAX declined 1.86% and France's CAC 40 fell 1.41%, while Switzerland's SMI closed 0.97% down.

Among other markets in Europe, Austria, Belgium, Finland, Iceland, Norway, Poland, Portugal, Spain, Sweden and Turkey lost 1 to 2.5%.

Italy's FTSE MIB index shed about 3.3% weighed down news about a parliamentary confidence vote that could potentially trigger the collapse of the coalition government.

Czech Republic, Denmark, Greece, Ireland, Netherlands and Russia ended with moderate losses.

In the UK market, Admiral Group plunged more than 18%. Fresnillo, Standard Chartered, Ocado Group, Anglo American Plc, Antofagasta, Rio Tinto, Aviva and Glencore shed 4 to 6%.

Rolls-Royce Holdings, BP, Shell, HSBC Holdings, Natwest Group, Lloyds Banking Group and Barclays were among other major losers.

Experian climbed more than 3.5%. Avast gained about 2.5%, while Entain, Centrica, Scottish Mortgage, RS Group, Pershing Square Holdings and IAG advanced 1.2 to 2%.

In the French market, Atos declined 4.6%. BNP Paribas, Societe Generale, ArcelorMittal, WorldLine, Valeo, Veolia, Credit Agricole, Unibail Rodamco, AXA, Renault, Faurecia, Publicis Groupe, Pernod Ricard and Carrefour also ended sharply lower.

Air France-KLM moved up more than 1%. Teleperformance, Vivendi and STMicroElectronics posted modest gains.

In Germany, Adidas, Continental, Allianz, Bayer, Munich RE, Symrise, Sartorius, Puma, BASF and Porsche Automobil lost 2.5 to 4%.

In the latest Summer economic forecast, released Thursday, the EU trimmed its growth outlook for this year slightly to 2.6% from 2.7%. Economic growth this year is propped up by the momentum gathered with the recovery of last year and a stronger first quarter than previously estimated.

Activity is expected to have weakened in the second quarter, but should regain some traction during summer, thanks to a promising tourism season, the EU said.

Gross domestic product is forecast to grow 1.4% in 2023, much weaker than the 2.3% in the Spring forecast.

Overall, real GDP is forecast to expand 2.7% in 2022 and 1.5% in 2023 in the EU. Inflation is seen at 8.3% this year and 4.6% in 2023.

Data from Destatis showed Germany's wholesale price inflation eased for the second straight month in June, though it remained strong overall.

The wholesale price index climbed 21.2% year-year-year in June, slower than the 22.9% rise in May.