European stocks close the week down on fear of recession

European stocks close the week down on fear of recession

European stocks fell on Friday and posted a weekly loss as rising German producer prices in July added to pessimism about the economic outlook for the region’s biggest economy and reignited fears of a recession.

* The pan-European STOXX 600 index ended down 0.8%, with travel stocks leading the declines.

* Rising energy prices due to the war in Ukraine caused German production costs to post the biggest increase in their history in July, both year-on-year and month-on-month. Energy prices as a whole soared 105% compared to July 2021.

* Germany’s DAX fell 1.1%, the biggest decline among continental peers, and Germany’s 10-year bond yield touched its highest level in four weeks.

* The benchmark index ended the week down around 1% as investors weigh weak economic data, the impact of tighter monetary policy, fears of spiraling inflation and contraction in equities. economies of the entire region. Last week it gained more than 1%.

* “European markets seem to have run out of breath this week, spooked in part perhaps by the big jumps in inflation we’ve seen in UK CPI this week, as well as the eye-catching rise in German PPI for July,” he said. Michael Hewson of CMC Markets UK.

* French catering and food services group Sodexo fell 1.3% after Jefferies cut the value to “hold” from “buy” to account for a cautious recession scenario during fiscal 2023-2024.

* Just Eat rose 25.8%, leading the STOXX 600 after agreeing to sell a 33% stake in Brazil’s iFood to tech investor Prosus for up to 1.8 billion euros ($1.8 billion). Prosus shares fell 1.3%.

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