European shares end lower on worries about a global recession

European shares tumbled on Wednesday, as worries about a global recession intensified after the heads of the European Central Bank (ECB) and the chair of the Federal Reserve maintained their aggressive stance on inflation.

The pan-European STOXX 600 index closed down 0.67% at 413.42 points, ending a three-day rally.

Losses were extensive, with emphasis on the real estate and automotive sectors, which dropped 3.5% and 2.6% respectively. Banks and mining companies were among the other sectors that weighed the most on the benchmark.

The era of ultra-low inflation that preceded the pandemic is unlikely to return and central banks will need to adjust to expectations of significantly higher price growth, said ECB President Christine Lagarde.

In turn, Fed Chair Jerome Powell said that while there is a risk of recession, the biggest risk is rising prices.

“Given the skittish nature of investors right now, Powell’s comment about controlling inflation requires ‘a little pain’ should make more investors hit the sell button,” said Chris Beauchamp, chief market analyst for the platform. online trading platform IG.

“It looks like we are still in the first phase of this bear market… So far, a sustained recovery seems unlikely.” The STOXX 600 is down more than 15% this year and is heading for its worst quarter since Covid-19 caused losses in 2020, as uncertainty over the Russia-Ukraine war, mounting price pressures and monetary policy rages on. affect risk appetite.

• In London, the Financial Times index dropped 0.15%, to 7,312.32 points;
• In Frankfurt, the DAX index fell 1.73% to 13,003.35 points;
• In Paris, the CAC-40 index lost 0.90%, to 6,031.48 points;
• In Milan, the Ftse/Mib index had a devaluation of 1.21%, to 21,833.50 points;
• In Madrid, the Ibex-35 index registered a drop of 1.56%, at 8,188.00 points;
• In Lisbon, the PSI20 index depreciated by 0.66%, to 6,131.79 points.