European Markets Advance, Spain's Growth Slows, UK Retail Sales Fall

Bridgette Randall
24 Jun, 2022
New York City

European markets jumped after investors set aside inflation and growth worries. 

Spain's economic growth slowed in the first quarter ending in March to 0.2% from 2.2% in the fourth quarter of 2021, according to the final revision released by the statistical office INE today. 

The annual growth in the first quarter was revised down to 6.3% from 6.5% but higher than 5.5% in the fourth quarter. 

Earlier in the month, The Bank of Spain lowered its 2022 growth estimate to 4.1% from 4.5% and 2023 growth estimate to 2.8% from 2.9%. 

The U.K. retail sales in May declined 0.5% on a monthly basis after rising 0.4% in April, according to the Office of National Statistics. 

Consumers retrenched after prices surged to record highs and food sales declined 1.6%. 

Non-food sales were unchanged in May and excluding transportation fuel, retail sales fell 0.7% after rising 0.2% in April. 

Retail sales decline eased to 4.7% in May from 5.4% in April, on an annual basis. 

Excluding transportation fuel, the fall in retail sales slowed to 5.7% from 6.9% in April. 

The DAX index rose 1.8% to 13,946.58, the CAC-40 index advanced 3.2% to 6,069.13, and the FTSE 100 index increased 2.5% to 7,191.66.

In the week, the indexes in Paris advanced 3.3%, in London gained 2.6%, and in Frankfurt nearly unchanged. 

Zurich Insurance Group gained 3.9% to 417.10 Swiss franc after the insurance company agreed to sell its legacy life insurance business in Germany to Viridium Holding AG. 

Saipem SpA plunged 19.7% to 24.34 euros after the oil and gas contractor said its finances will be exhausted by the end of the first quarter 2020 if the company fails to raise capital. 

Lamprell Plc dropped 78.2% to 4.75 pence on the liquidity worries. 

TUI AG declined 3.6% to 1.70 euros after the CEO of the German tourism and travel company abruptly resigned. 

 

Asian Markets Extend Rally 

Asian markets rebounded on the final day of the week supported by a sustained advance in the U.S. and weaker commodities prices. 

The market sentiment turned positive and investors looked ahead to corporate results for the current quarter. 

The Nikkei index in Japan closed higher led by gains in tech stocks. 

The battered yen found support at 135.17 against a dollar after inflation gained for the second month in a row and stayed near a 7-year high. 

Consumer price inflation in May increased to 2.5% from a year ago and on a seasonally adjusted monthly basis slowed to 0.2% from April after rising 0.4% in the month.

The inflation data were released by the internal affairs ministry today. 

The Nikkei index in Tokyo added 1.2% to 26,491.97 and for the week increased 1.95%. 

Tokyo Electron gained 4%, Advantest increased 3.5%, and Screen Holdings increased 2.6%. 

Stocks in Hong Kong and Shanghai gained on the hopes that the technology crackdown is easing and the economic activities are on the rebound after two months of severe lockdowns across the nation. 

Indexes in Hong Kong gained 1.3% to 21,273.34 and in Shanghai rose 1.6% to 3,320.15. 

For the week, the Hang Seng advanced 3.7% and the SSE gained 1.0%. 

Stocks in Mumbai advanced for the second day in a row following advances across Asia. 

Investors looked beyond rate hikes and elevated commodities prices and focused on earnings growth in the current quarter. 

Traders also took note of the latest comments from the RBI Governor Das. 

Das commented that headline inflation is likely to stay above the central bank's target rate of 2% until December and moderate after. 

"Inflation expectations influence not only households but also businesses and drive up pricing of food, manufactured goods and services. 

If they expect inflation to be high, even companies will defer their investment plans," Das commented. 

The Sensex index gained 462.25 or 0.9% to 52,727.98 and the Nifty 50 index increased 0.9% to 15,699.65.

For the week, the Sensex and the Nifty gained 2.8% and in the year so far declined 10.9%. 

The Kospi index in Seoul rebounded 2.3% to 2,366.60 after hitting a 19-month low on recession worries in the previous session. 

Naver Corp surged 5.8%, Samsung Electronics increased 1.7%, and SK Hynix closed up 1.6%.