Euro Inches Two-Decade Low On Recession Fears, European Markets Drop 2%

Bridgette Randall
05 Jul, 2022
New York City

Market indexes in Europe dropped more than 2% as fears of a recession escalated in the union on soaring inflation and no end in sight of a war in Ukraine.  

The DAX index fell 2.4% to 12,464.54, the CAC-40 index declined 2.4% to 5,810.58, and the FTSE 100 index dropped 2.6% to 7,047.26. 

The euro accelerated its decline in the year so far and plunged to a two decade low. 

The euro declined 1.3% to $1.029 and extended this year's loss to 9% after skyrocketing energy prices has driven inflation in the currency zone to a four-decade high.  

Market worries were compounded after coronavirus infections flared up in easter region of China and local authorities imposed mass testing in at least three cities. 

Industrial production in France was unchanged in May from the revised 0.3% decline in April, the France's statistical office or Insee said on Tuesday. 

Manufacturing rebounded 0.8% in May, construction output increased 0.4%, bit utility production declined 5.6% from a year ago. 

The euro zone private sector activity expanded at a slower pace in June after service sector growth slowed and the manufacturing sector contracted for the first time in two years, the final survey results from S&P Global reported on Tuesday.  

The final composite output index fell to 52.0 in June from 54.8 in May and any reading above indicates expansion and below shows contraction. 

Scandinavian Airlines SAS AB dropped 10.5% to 55 krona cents after the company sought bankruptcy protection in a U.S. court to accelerate its restructuring plan. 

Delivery Hero SE gained 1.5% to 35.69 euros after the delivery services provider said it has completed the acquisition GlovoApp23 S.A.

J Sainsbury Plc increased 1.1% to 210.68 pence after the retailer confirmed its full-year outlook. 

The retailer said total sales excluding fuel sales declined 4.5% and grocery sales were down 2.4% in the sixteen week period ending on June 25.

The company confirmed  fiscal year 2022-23 underlying profit before tax of between