Europe shares drop for fourth day on global recession fears
written by Bella PalmerThe Stoxx 600 closed 0.6 per cent lower, taking cues from Wall Street declines overnight after big US banks cautioned of a likely recession next year
European shares fell for a fourth straight session on Wednesday, with investors on edge as global recession fears grew, but losses were limited by gains in healthcare stocks.
The region-wide Stoxx 600 closed 0.6 per cent lower, taking cues from Wall Street declines overnight after big US banks cautioned of a likely recession next year.
There is a sense of nervousness and jitteriness in the markets today, said Victoria Scholar, head of investment at Interactive Investor, citing more volatility as the year-end approaches.
Markets are not out of the woods yet with headwinds remaining from the gas crisis, inflation, monetary tightening and the threat of recession, she said.
A recent stock rally driven by hopes of a less aggressive Federal Reserve has been tested in recent days after strong US economic fuelled fears that the central bank could keep hiking interest rates for longer.
Markets now await a slew of interest rate decisions, including from the Fed and European Central Bank (ECB) next week, for further clues on the direction of monetary policy.
On the pan-continent Stoxx 600 index, energy stocks led declines, falling 2.0 per cent as crude prices slid after US data showed an unexpectedly large build in fuel stocks, feeding fears about demand in a market already spooked by an uncertain economy.
Banks fell for their third straight session, also weighing on the Stoxx 600.
Euro zone government bond yields hit fresh multi-week lows amid conflicting signals about when inflation will peak.
A survey showed rising inflation expectations for the year ahead but expectations for three years ahead were unchanged at 3.0 per cent, well above the ECB’s 2 per cent target.
Disclaimer:
The opinions expressed by our writers are their own and do not represent the views of UK Investment Guides. The information provided on UK Investment Guides is intended for informational purposes only. UK Investment Guides is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.