European Stocks Close Lower on Fresh UK Inflation High, Record Eurozone Confidence Low

Last Updated: Wednesday, July 20, 2022 12:28 PM | MT Newswires

European bourses snapped a three-day winning streak on Wednesday as UK and eurozone data painted worsening conditions and sentiment in the region.

Stoxx Europe 600 was down 0.21%, London's FTSE 100 lost 0.44%, the Swiss Market Index fell 0.56%, France's CAC declined 0.27% and Germany's DAX was off 0.20%.

The UK reported inflation for June at 9.4%, a new 40-year high amid soaring food and energy prices. Daiwa Europe expects the peak in October at 10.5% while ING estimates it at 11%. Both said the June data supports a 50-bps interest rate hike at the Bank of England's August meeting.

Amid the cost-of-living crisis, the race to replace Boris Johnson as prime minister is down to former Treasury Chief Rishi Sunak and current Foreign Secretary Liz Truss. Johnson, who was forced to resign, ended his last parliamentary appearance Wednesday listing his pandemic accomplishments, closing his speech saying "Mission largely accomplished ... hasta la vista, baby."

A new UK prime minister is expected to be announced Sept. 5.

Meanwhile, consumer confidence in the eurozone fell to its lowest level on record in July at -27, worse than the -24.9 estimate, as worries of a Russian energy shutdown gain more traction. The data was released shortly before the European Commission asked member states to reduce gas use in the bloc by 15% until spring 2023 to support efforts to steer away from Russian gas dependence.

"Russia sees gas as a political weapon. So, we need to have a European level political response," EU Commission Executive Vice President Frans Timmermans said. "So we cannot in good conscience allow the situation to spiral out of control because it will, as I said, also cause significant economic damage. But we can reduce potential GDP losses if we apply preventive reductions now instead of taking reactive measures later."

In corporate news, ABB (ABB.SW) gained 0.74% on plans to spin off and then list its Accelleron turbocharging business on the Swiss bourse. On the other hand, Barry Callebaut (BARN.SW) fell 0.29% after the world's biggest chocolate maker flagged a "notable financial impact" in its Q4 results from the salmonella outbreak at its Wieze factory in Belgium, detected June 27.

Share this article:

You May Also Like

Related Articles

Sector Update: Energy Stocks Climb Premarket Tuesday

Sector Update: Financial Stocks Gain Pre-Bell Tuesday

Sector Update: Health Care Stocks Climb Pre-Bell Tuesday

Sector Update: Consumer Stocks Rally Premarket Tuesday