European Market Fall On Inflation Worries, Cineworld Plunges 90%

Bridgette Randall
19 Aug, 2022
Frankfurt

European markets closed down amid worries of economic slowdown, soaring inflation, and the prospects of interest rate hikes in coming months.  

European markets have gained at least 7% since mid-June on the hopes that the inflation is peaking and future rate hikes are less likely. 

However, the U.S. Federal Reserve's latest minutes of meeting poured cold water on market optimism. 

The DAX index declined 1.1% to 13,544.52, the CAC -40 index fell 0.9% to 6,495.93, and the FTSE 100 index added 0.1% to 7,550.37. 

The dollar rebounded in the euro dropped to 1$1.004 and the U.K. pound declined to $1.18 after the release of the retail sales data. 

Retail sales in July unexpectedly increased 0.3% on a monthly basis after rising at 0.2% in June, the Office for National Statistics reported Friday. 

On a yearly basis, retail sales declined 3.4% in July and sales are likely to fall as inflation surges above 10%. 

Germany's producer price index, a measure of wholesale prices, soared to 37.2% in July after rising 32.7% in June, the Destatis reported Friday. 

The latest surge in wholesale prices was driven by a 105% jump in energy prices from a year ago. 

 Cineworld Group, the second largest operator of movie theater chain, plunged as much as 90% before recovering to close down 60% to 4.07%. 

The parent of Regal Cinemas, operates more than 540 locations in the U.S. and more than 750 worldwide, a day ago announced that existing shareholders may be diluted significantly in the event of new capital injection. 

Following the announcement today, the company is looking for bankruptcy advisors in the U.S. and the U.K. 

In Paris trading, ArcelorMittal and Air France-KLM led the decliners with a loss of 5%. 

Societe Generale, BNP Paribas, Credit Agricole, Accor, Renault, and Airbus Group fell between 3% and 3.5%. 

In Frankfurt trading, Deutsche Bank, Deutsche Lufthansa, Daimler, Porsche Automobil, BMW, Infineon, and Vonovia declined between 3% and 5%. 

FLSmidth & Co soared 9.8% to 221.0 Danish kroner after the Danish mining equipment maker lifted its annual outlook. 

The Swiss benchmark SMI closed down 10.87 points or 0.1% to 11,156.72 after dropping as low as 11,125.80 and trading as high as 11,241.18.

Swiss industrial production rose 5.1% in the second quarter, the Federal Statistics Office reported Friday. 

Credit Suisse and UBS Group declined nearly 4% and Dufry, Flughafen Zurich, and VAT Group fell between 2% and 4%.