Sharp decline in European shares slump in UK retail sales

Sharp decline in European shares slump in UK retail sales

Written by Peter Norse – European stock markets were trading sharply lower on Friday, amid renewed fears that aggressive monetary tightening would trigger a global recession.

By 03:55 ET (07:55 GMT), trading in Germany was down 1.8%, in France it was down 1.4%, and the UK was down 0.4%.

Warnings of an impending global economic slowdown by both the World Bank and International Monetary Fund weighed on sentiment on Friday, with Endermit Gill, the World Bank’s chief economist, saying he was concerned about “generalized stagflation,” a period of low growth and high inflation. .

More evidence of this slowdown emerged on Friday as the UK posted its biggest drop of the year so far in August, falling 1.6% on the month and 5.4% over the year.

The numbers were well below analysts’ expectations for a decline of 0.5% in the month and 4.2% over the year and add to the picture of an economy rapidly sliding into recession.

Attention will turn to the August data release, 05:00 ET (09:00 GMT), which is expected to rise 0.5% in the month, up 9.1% on the year.

It raised key interest rates by 75 historical basis points last week, and signaled more hikes ahead as policy makers try to control these higher rates.

In corporate news, Uniper (ETR 🙂 stock is down 12% as Germany is close to acquiring a controlling stake in the struggling gas importer, which could pave the way for a full nationalization of the company.

Germany also placed the German subsidiary of Russian oil giant Rosneft under guardianship on Friday, handing control of the PCK refinery in Schwedt to the federal regulator.

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Oil prices stabilized on Friday after heavy losses in the previous session, but were heading for the third consecutive week of losses amid concerns that aggressive monetary tightening will hurt global growth and thus fuel demand.

The crude oil market was also hit hard in the wake of hot US inflation data, which makes oil more expensive for buyers using other currencies.

By 03:55 ET (07:55 GMT), futures were down 0.2% at $84.97 a barrel, while the contract was up 0.1% at $90.94. Both contracts were down about 4% on Thursday, and were set to lose nearly 2% for the week.

In addition, it was down 0.8% to $1,663.80 an ounce, while trading was down 0.4% at 0.9957.

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