European shares end lower after earnings raise concerns

European shares closed lower on Tuesday (24), following losses on global stocks after business expansion data for May renewed investor worries about slowing economic growth and tightening monetary policy.

The pan-European STOXX 600 index closed down 1.14% at 431.58 points and gave back almost all of Monday’s gains.

Business growth in the euro zone has slowed this month and raw material shortages have impeded expansion in manufacturing, according to preliminary data from the Purchasing Managers’ Index (PMI). This raised concerns about global growth.

“Clouds are gathering above the eurozone economy,” said Bert Colijn, senior eurozone economist at ING. “And the question is really how long can the service sector continue to profit from consumers… as we also see that purchasing power is under extreme pressure due to high inflation.”

All major sectors recorded broad declines, with luxury stocks and retailers, which are affected when disposable income is reduced, in the lantern.

The STOXX 600 is down more than 12% from this year’s highs, reached in early January.

• In London, the Financial Times index dropped 0.39%, to 7,484.35 points;
• In Frankfurt, the DAX index fell 1.80% to 13,919.75 points;
• In Paris, the CAC-40 index lost 1.66%, to 6,253.14 points;
• In Milan, the Ftse/Mib index had a devaluation of 1.08%, to 23,876.08 points;
• In Madrid, the Ibex-35 index registered an increase of 0.06%, to 8,631.20 points;
• In Lisbon, the PSI20 index rose by 0.85%, to 6,130.90 points.