European stock markets closed lower, in a session marked by the expectation of a restrictive level in the interest rate increase by the European Central Bank (ECB) and with an increase in cases of Covid-19 in China putting pressure on the markets.
In London, the FTSE 100 fell 0.12%, to 7,376.85 points, while the CAC 40, in Paris, fell 0.15%, to 6,634.45 points, and the FTSE MIB, in Milan, closed lower of 1.29%, to 2,4356.05 points.
On the Lisbon Stock Exchange, the PSI 20 closed in stability, at 5,766.14 points and, in Madrid, the Ibex 35 index took off and rose 0.77%, at 8,190.60 points. Quotes are preliminary.
In Frankfurt, the DAX index, closed down 0.36%, to 14,379.93 points, after the publication of the producer price index (PPI), which was up 34.5% in the annual comparison, but which represented a drop from the all-time highs of the previous two months.
ECB Governing Council member Bostjan Vasle highlighted that the institution needs to continue gradually increasing interest rates, putting pressure on risky assets.
The opinion is in line with the speech of the president of the monetary authority, Christine Lagarde, who highlighted last Friday (18) that the ECB will raise interest rates to avoid persistent inflation in the future.
The entity’s chief economist, Philip Lane, said that the ECB will raise interest rates and that, even so, it will not have reached the necessary point to pause the tightening. However, the leader signaled less aggressive increases than the 75 basis points adopted in the last two ECB meetings.
In an interview with the newspaper EconostreamRobert Holzmann, also the head of the European Central Bank, said his vote for a 50bp or 75bp increase would depend mainly on inflation.
The increase in the rate worries investors because companies depend on reasonable interest rates to finance themselves. The focus on these central bank decisions is heightened this week, with the publication of ECB and Fed minutes in the coming days.
According to analysis by CMC Markets, European equity markets also reacted to the rise of Covid-19 infections in China.
This Monday, the country announced the first death from the disease in almost six months, while continuing with restrictive measures to prevent further outbreaks.
On Monday, the news of a possible increase in oil production by the Organization of Petroleum Exporting Countries (OPEC+) stirred oil company stocks.
Shares of Harbor Energy and Shell on the London Stock Exchange closed down over 8% and 3% respectively.
Source: CNN Brasil
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