European stocks have their worst quarter since early 2020

European stocks on Thursday posted their worst quarter since losses caused by the pandemic in early 2020, as investors increasingly wary of a global recession in the wake of central bank actions to tame inflation.

All major sectors were in negative territory. Banks weighed in the most, with a gauge of eurozone creditors down 3.3% to lows since March, after the European Central Bank’s (ECB) top supervisor urged banking institutions to calculate downside risks. recession.

The pan-European STOXX 600 index closed down 1.50% at 407.20 points and recorded quarterly declines of 10.7%. Mining companies were among the biggest weights in the index during the quarter, with losses of more than 20%.

With eurozone prices rising to record levels, data on Thursday showed that inflation in France in June accelerated from the previous month to a 12-month record of 6.5%, and weighed on the local stock index. , which dropped 1.8%.

“What we’re seeing right now is more evidence that inflation is severe, entrenched and investors are now having to re-evaluate the values ​​they are putting on equities,” said Azad Zangana, senior economist and European strategist at Schroders.

All eyes are now on the first estimate of June inflation in the euro zone on Friday, which is due to be reviewed by the ECB ahead of its July 21 monetary policy meeting, at which it is expected to raise interest rates for the first time. time since 2011.

• In London, the Financial Times index dropped 1.96%, to 7,169.28 points;
• In Frankfurt, the DAX index fell 1.69% to 12,783.77 points;
• In Paris, the CAC-40 index lost 1.80%, to 5,922.86 points;
• In Milan, the Ftse/Mib index had a devaluation of 2.47%, to 21,293.86 points;
• In Madrid, the Ibex-35 index registered a drop of 1.09%, at 8,098.70 points;
• In Lisbon, the PSI20 index depreciated by 1.42%, to 6,044.64 points.