European Markets Drop 2%, Eurozone Growth Estimate Lowered

Bridgette Randall
14 Jul, 2022
New York City

European markets extended losses on the worries of faster increase in interest rates and mixed earnings reports. 

The DAX index declined 1.9% to 12,509.64, the CAC-40 index fell 1.6% to 5,902.25, and the FTSE index dropped 1.96% to 7,015.10. 

The euro extended its losses to a low last seen since 2002 of $0.99.  

Benchmark indexes dropped on the worries of rising inflation after the U.S. wholesale prices rose 11.3% stoking the fears of faster rate increases. 

The eurozone economic growth in 2022 was lowered to 2.6% from the previous estimate of 2.7% released three months ago, the European Commission said in its summer report on Thursday. 

The commission downgraded the outlook citing the surging inflation, ongoing China coronavirus challenges, and continued war in Ukraine. 

The estimate of the economic growth in 2023 was also lowered to 1.4% from the Spring estimate of 2.3%. 

Germany's growth outlook was lowered to 1.4% and 1.3% and France's estimate was lowered to 2.4% and 1.4% in 2022 and 2023 respectively. 

However, Spain's economy is expected to expand 4.0% in 2022 and 2.1% in 1.4% in 2023 and Italy's economy is set to grow 2.9% and 0.9% respectively. 

Ericsson dropped 9.2% to skr 71.88 after the telecom equipment maker said revenues in the June quarter rose 14% to skr 62.5 billion from skr 54.9 billion. 

Net income rose 19% to skr 4.7 billion or skr 1.35 per share from skr 3.9 billion or skr 1.10 a share a year ago. 

Free cash flow in the quarter increased to skr 4.4 billion from skr 4.1 billion a year ago.    

Experian Plc gained 2.8% to 2,647.05 pence after the British credit reporting service reported revenues in the latest quarter increased 7% and jumped 9% on a constant currency basis. 

Hugo Boss gained 2.5% to 55.80 euros after the high-end men's fashion company lifted its financial year outlook. 

full-year sales are expected to increase between 3.3 billion and 3.5 billion euros and operating earnings between 285 million and 310 million euros. 

Sales in the second quarter rose 29% to 878 million euros and jumped 34% when adjusted for currencies and operating earnings of 100 million euros.