European Markets Accelerate Declines, Record German CPI and Italian PPI

Bridgette Randall
29 Sep, 2022
New York City

Benchmark indexes in Europe resumed their declines after recession worries gripped the market. 

Benchmark indexes across Europe opened weaker a day after the Bank of England intervened to stabilize bond and currency trading in the UK. 

However, the boost from the emergency operation faded in less than 24 hours and the market averages and the pound resumed their slides again. 

Major averages accelerated the declines after the release of the U.S. jobs report indicating the strength in the labor market. 

Initial weekly jobless claims rate dropped less-than-expected to 196,000 in the week ending September 24. 

The fewer-than-expected claims offered yet another impetus to the Federal Reserve in continuing its campaign to lift by a large amount of 75 basis points.  

In other economic news, a measure of sentiment weakened in September, the European Commission reported Thursday. 

 

Eurozone Economic Sentiment Worsens 

 The economic sentiment - an aggregate index of business and consumer sentiment - in the euro declined to 93.7 in September from 97.3 in August, the European Commission said on Thursday. 

The index dropped to a two-year low, the lowest level seen since November 2020. 

Inflation expectation index increased to 41.3 in September from 37.0 in August.   

 

Consumer Prices Jump Record 10% In Germany 

Consumer prices in Germany shot up a record 10.0% from a year ago in September, according to a preliminary report released by the Federal Statistics Office or Destatis on Thursday. 

Consumer price inflation accelerated after rising 7.9% in August. 

On a monthly basis, prices rose 1.9% in September, slower than 

The goods price surged 17.2% in September from 14.7% in August and services prices rose 3.6% from 2.2% in the corresponding period. 

 

Record Jump In Italian Wholesale Prices 

Wholesale prices in Italy surged to record 40.1% in August after rising 36.9% in July, the National Institute of Statistics said on Thursday. 

The producer price increase was driven by a surge in energy costs of 126.8% followed by intermediate goods price increase of 17.8%, consumer goods 9.5% and capital goods 9.1%.  

 

European Markets Accelerate Declines

The DAX index declined 1.6% to 11,995.17, the CAC-40 index dropped 1.44% to 5,681.94 and the FTSE 100 index fell 1.2% to 6,919.76. 

Brent crude rose 80 cents to $90.111 a barrel and TTF natural gas futures plunged 9.9% to 186.50 megawatt per hour. 

The euro inched higher to 97.16 U.S. cents and the British pound rebounded slightly to $1.093. 

 

Hong Kong Extend Losses Ahead of Week of Holiday

China benchmark indexes ended flat ahead of the 7-day Golden Week holidays between October 1 and 7. 

The Shanghai Composite Index eased 0.1% lower to 3,041.20, erasing most of the early gains in the day. 

The  Hang Seng Index ended down 0.5% to 17,165.87, after dropping to the low last seen in October 2011.  

The Hang Seng index has lost about 40% in the last five years. 

In Tokyo, the Nikkei 225 index gained 1.0% to 26,422.05 and the broader Topix increased 0.7% to 1,868.80.

Pharmaceuticals and resource sector stocks led the gainers. 

The Japanese yen held steady at 144.52 to a dollar. 

Benchmark indexes in Mumbai turned lower ahead of the rate decision from the Reserve Bank of India on Friday. 

The RBI is expected to lift the key lending rate by at least 40 basis points and stem the slide in the rupee. 

The Indian rupee dropped to a new low of 81.80 to a dollar.