Euromarkets: ‘Balance exercise’ after worst quarter in 2+ years

Euro markets entered the third quarter with mixed signs, collecting or erasing intra-session losses, as investors try to put behind them the worst quarter since the outbreak of the pandemic at the beginning of 2020, with the financial data announced today forming a particularly worrying picture for the future.

The inflation rally and interest rate hikes by central banks continue to weigh on investment sentiment. Inflation data released today also showed new record of prices in June. Particularly, Eurozone inflation reached 8.6% in June against 8.1% in May, as announced by Eurostat, surpassing estimates for 8.4%.

The figures announced today for the manufacturing sector were also disappointing, with the sector’s activity shrinking for the first time since the outbreak of the pandemic in early 2020.

Particularly, the index for manufacturing output fell to a 24-month low in June to 49.3 points from 51.3 points in May, S&P Global announced today. The 50-point level separates expansion from contraction in activity.

Manufacturing PMI fell to a 22-month low, however remaining above the level of 50 units. In particular, it stood at 52.1 points from 54.6 points in May.

Data from S&P Global showed German manufacturing activity fell to a 23-month low, France’s to an 18-month low and Italy’s to a two-year low.

In this climate, the pan-European index Stoxx 600 ended the session marginally lower (-0.02%) at 407.13, with the technology sector down 2% and utilities stocks adding 3%.

The pan-European index closed the second quarter of 2022 with total losses of 9%, marking the worst quarter since the outbreak of the pandemic in 2020. Since the beginning of the year, the index has tumbled 16.6% amid intensifying concerns about the path of the global economy. economy as the war in Ukraine continues unabated and inflationary pressures escalate, prompting central banks to aggressively raise interest rates.

In the individual boards, the German DAX posted gains of 0.23% at 12,813.03 units, the French CAC 40 added 0.14% to 5,931.06 units, while the British FTSE 100 closed marginally lower at 7,168.65 points.

In the periphery the Italian FTSE MIB strengthened by 0.29% to 21,354.65 units, while the Spanish IBEX 35 rose 0.96% to 8,176.10 points.

In the individual shares Dutch chipmaker ASMI fell 9%, while Swedish real estate firm SBB was the biggest gainer, jumping 9% after the release of its 2021 cash position.