Heavy losses of more than 3% in Europe as interest rates tighten

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The main markets in Europe were in a siege of liquidations, as the successive interest rate hikes by the central banks worldwide intensified the fears for a global recession.

In particular, the pan-European Stoxx 600 index closed with a dip of 2.38% at 403.25 points, falling to a low from February 2021.

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Technology companies have been pounding with the SX8P index plunging 4.4%, as emerging market securities are traditionally thought to be hit hardest by rising borrowing costs.

Close up, the SXRP of retail trade also recorded strong losses of 3.8%, mainly due to the brutal dive of 32% of the British ASOS, which warned that the growing inflationary pressures are affecting consumer behavior.

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Even greater were the pressures on the European high capitalization of the Stoxx 50, which sank by almost 3%, falling to 3,426 points.

The picture was similar for the individual European boards, where in Germany the DAX closed at -3.35% and 13,033 points, the French CAC 40 lost 2.4% at 5,886 points, as well as the British FTSE 100 which finished with – 3.1% at 7,048 points.

In the region, the Italian FTSE MIB fell by 3.3%, closing at 21,726 points, while the Spanish IBEX 35 reduced the losses to 1.18%, finishing at 8,078 points.

As central banks around the world raise interest rates one after the other and at faster-than-expected rates, the simultaneous drainage of liquidity to tame inflation is increasingly fueling fears of a global recession.

In particular, the US Federal Reserve yesterday raised the largest interest rate increase in the last three decades, since 1994, by 0.75%.

Then today, in a surprise move, the Swiss central bank raised the key interest rate by 0.5%, to its first increase in 15 years, while in England the BoE increased its own by another 25 basis points.

In individual stocks, Zalando with -12.5%, Delivery Hero with -9.8% and Just Eat Takeaway.com with -9.15% showed the worst returns.

Inchcape, on the other hand, finished at the top of the Stoxx 600 with a rise of 3.8% after announcing that it showed increased sales compared to its estimates.

Source: Capital

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