European stocks post two weeks of gains as growth fears weigh

The DAX chart of the German stock price index is pictured on the stock exchange in Frankfurt, Germany, August 4, 2022. REUTERS/Staff

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  • Lufthansa ground staff agree on pay deal after strike
  • Deutsche Post tops the STOXX 600 in the second quarter
  • STOXX down 0.6% over the week

Aug 5 (Reuters) – European stocks fell on Friday after a stronger than expected U.S. jobs report raised bets on another 75 basis point rate hike by the Federal Reserve in the month next, as fears of a darkening growth outlook pushed stocks toward weekly losses .

The pan-European STOXX 600 (.STOXX) fell 0.8%, extending early-day losses after US non-farm payrolls rose by 528,000 jobs last month, the biggest gain since february. Read more

The benchmark index lost 0.6% this week, spending two weeks in positive territory, on concerns over weak economic data from the region, rising geopolitical tensions and fears that interest rates higher will tip the economy into a recession. Read more

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“The data released this week adds to the evidence that a recession is imminent,” said Jack Allen-Reynolds, senior economist for Europe at Capital Economics.

Figures this week also showed eurozone retail sales fell in June and ex-factory prices continued to rise, while eurozone business activity contracted in July to the first time since the beginning of last year. Read more

“Forward-looking indicators suggest the worst is yet to come…If we’re right, the European Central Bank will raise interest rates more aggressively than currently market forecast, and the economy will underperform forecasts. consensus.”

Eurozone government bond yields have surged, with the German 10-year bond yield lately rising 9 basis points to 0.89%.

The company’s results were mixed on Friday, with Deutsche Post (DPWGn.DE) up 4.6% after posting double-digit revenue and profit growth. Read more

The London Stock Exchange Group (LSEG.L) gained 1.6% as it said cost and savings targets for the integration of its $27 billion acquisition of data firm Refinitiv remain unchanged and that it was launching a 750 million pound ($910.65 million) share buyback. Read more

Allianz fell 1.6%. The insurer spent around 140 million euros ($143.11 million) on restructuring to shut down a US fund unit at the center of a multi-billion fraud, and saw a 23% drop in its quarterly profit worse than expected. Read more

Germany’s Lufthansa (LHAG.DE) ground staff and management reached a pay deal after negotiations, averting further walkouts during the busy summer travel season. Shares of the carrier rose 4.0%. Read more

Miners (.SXPP) were the biggest gainers, jumping 1.1%, following a rise in prices for copper and other base metals as investors focused on low stocks and supply threats.

Oil stocks (.SXEP) reversed early declines to edge up 0.6% on a rebound in crude prices.

German industrial production posted an unexpected but modest increase in June, official data showed, despite supply chain issues weighing on manufacturing.

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Reporting by Bansari Mayur Kamdar and Anisha Sircar in Bengaluru; Editing by Shounak Dasgupta and Christina Fincher

Our standards: The Thomson Reuters Trust Principles.

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