European Shares End Week Largely in the Green; Eurozone, UK PMIs Drop

Last Updated: Friday, July 22, 2022 12:46 PM | MT Newswires

Friday trading in European stocks ended mostly in the green, closing an eventful and historic week in policymaking, while new economic data affirmed growing expectations of a 2022 eurozone recession.

Stoxx Europe 600 was up 0.40%, London's FTSE 100 added 0.08%, France's CAC gained 0.25% and Germany's DAX increased 0.05%. Meanwhile, the Swiss Market Index erased 0.35%.

A day after the European Central Bank raised rates by a bigger-than-expected 50 basis points, S&P Global said the eurozone economy slipped into contraction territory in July. The S&P Global flash composite output index was at a 17-month low of 49.4.

"The eurozone economy looks set to contract in the third quarter as business activity slipped into decline in July and forward-looking indicators hint at worse to come in the months ahead," S&P Global Market Intelligence Chief Business Economist Chris Williamson said. "These inflation gauges remain higher than at any time prior to the pandemic, underscoring the unenviable challenge facing policymakers of taming inflation while avoiding a hard landing for the economy."

The UK's S&P Global flash services PMI fell to its lowest reading in 17 months in July, and the manufacturing PMI at a 25-month low. Official data, meanwhile, showed a 5.8% drop in retail sales in June, worse than the 5.3% estimate.

Meanwhile, the European Commission formally launched four new infringement procedures against the UK over its planned unilateral changes to the Northern Ireland Protocol. The British government has two months to respond to the commission, and a failure to do so will result in further measures including a lump sum or penalty payment.

In corporate news, elevator and escalator manufacturer Schindler Group (SCHN.SW) posted a 36.5% drop in H1 profit, prompting a guidance cut. Its shares shed 4.37%. Shares of gas company, Uniper (UN01.F), which have taken a beating due to the Russia-Ukraine war, plunged almost 30% after revealing a 15 billion-euro bailout package from the German government.

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