European Markets Turn Lower On Growth Slow Down Worries

Bridgette Randall
23 Jun, 2022
New York City

European markets extended losses for the second day in a row on the worries that the region's economy is slowing faster than anticipated. 

The euro zone private sector expanded at the slowest pace in a year after service sector growth eased and the manufacturing sector contracted for the first time in two years. 

The flash composite output index dropped to a 16-month low of 51.9 in June from 54.8 in the previous month, the preliminary data from S&P Global.  

Separate surveys also showed  a sharp decline in business activities in France and Germany, two largest economies in the currency block. 

The DAX index fell 1.04% to 13,027.62, the CAC-40 index declined 0.2% to 5,907.52, and the FTSE 100 index dropped 0.5% to 7,055.07.

Oil companies extended losses after crude oil prices declined 2% in the region.

In volatile trading BP Plc and Shell Plc traded sideways with a negative bias. 

Mining companies declined for the second day on the recession worries in the U.S. 

Antofagasta Glencore, Anglo American declined between 1% and 4%. 

Siemens Energy dropped 3.2% to 15.27 euros and Air Liquid edged down 0.5% to 129.56 euros after the two companies announced a joint venture to make industrial scale hydrogen electrolyzers. 

Siemens Gamesa Renewable Energy SA was nearly unchanged at 17.85 euros after the wind turbine maker won an order of 60 turbines to supply Moray West Wind Farm located in Scotland. 

 Assicurazioni Generali gained 0.2% to 19.99 euros after the Italian insurance company announced a group organization structure. 

 

Asian Markets Extend Gains

 

Across Asia, market indexes closed higher after energy prices eased. 

Crude oil prices in Asia declined for the second day and extended 2-day losses to 5.5% and natural gas prices dropped 0.6% in the region on the worries of a global recession.

Indexes in China gained on local media reports suggesting that the government is considering extending the tax break for electric vehicles. 

Separately, an executive committee also approved a plan for fintech and large digital payment network operators. 

The Nikkei index in Japan closed marginally higher and resource stocks led the decliners. 

The Nikkei index in Tokyo added 0.08% to 26,171.25 and indexes in Hong Kong gained 1.3% to 21,273.34 and in Shanghai rose 1.6% to 3,320.15.

Sumitomo Metal Mining dropped 6% and Inpex Corp fell 2.6%. 

In Mumbai, stocks advanced for the second day after the latest minutes of meeting from the monetary policy committee stressed the direction of inflation rather than its level.  

The Sensex index gained 709.54 or 0.9% to 52,265.23 and the Nifty 50 index advanced 0.93% to 15,556.65.

Automakers led the gainers on earnings optimism in the current quarter.