Sell-off in the European markets, the Stoxx 600 plunges 4%

LAST UPDATE: 17:20

European stock markets are on a free fall on Monday as investors prepare for the prospect of a tighter monetary policy this year in the US at a time when pressures on economic activity are growing again due to the omron micron mutation.

Investors await the Federal Reserve announcements on Wednesday following the conclusion of a two-day monetary policy meeting. Although the central bank is not expected to raise interest rates, postponing its interest rate hikes until March, the meeting will monopolize investor interest as it is expected to provide new information on how the central bank plans to move in the coming months. .

At the same time, investors are watching developments in Ukraine as tensions escalate with Russia, and weigh on fears of a possible Russian military strike on the neighboring country.

On Sunday, the US government ordered the families of US diplomats stationed in Kiev to leave Ukraine“because of the constant threat of a Russian military operation,” the State Department said in a statement.

At the same time, the US government called on US citizens to refrain from traveling to Russia “because of the tension on the border with Ukraine,” the State Department said yesterday.

By contrast, the European Union has no plans to withdraw the families of its diplomats from Ukraine at this time, EU foreign policy chief Josep Borrell has said, adding that a military strike by Russia could come at any time.

In this climate, the pan-European index Stoxx 600 falls 4% to 455.52 points, with the travel and leisure sector losing 5.5%.

The German DAX loses 3.95% to 14,987.40 points, the French CAC 40 notes a fall of 4.1% to 6,775.91 points, while the British FTSE 100 declines by 2.7% to 7,288.69 points.

On the periphery, the Italian FTSE MIB slips 4.4%, while the Spanish IBEX 35 declines by 3.58%.

The investment climate is aggravated by the data announced today and showed how Eurozone economic recovery weakened further this month, as the new restrictions imposed on the restraint of Omicron, affect the activities in the service sector, while prices continue to rise.

In particular, IHS Markit’s composite PMI fell to 52.4 points in January from 53.3 points in December, the lowest level since February and lower than estimates for 52.6 points.

The data was affected by the services PMI, which stood at a nine-month low at 51.2 from 53.1 points.

In the individual shares, Unilever adds nearly 7%, following reports that Trian Partners, Nelson Peltz’s activist hedge fund, has created a stake in the consumer goods company.

In the scope of results, Royal Philips announces that sales and net profit for the last quarter of the year decreased, as it continued to experience challenges in relation to the supply chain and the coronavirus. The Dutch health technology company said that sales for the group in the fourth quarter of 2021, amounted to 4.9 billion euros compared to 6 billion euros a year ago.

In corporate news, the French luxury goods group Kering, announced that has agreed to sell the Swiss watch brands Girard-Perregaux and Ulysse Nardin, to the teams that run these watch companies.

In addition, Accell Group announces € 1.56 billion acquisition of Kohlberg Kravis Roberts & Co. Under the agreement, the shareholders of the Dutch bicycle company will receive 58 euros for each share, which is a 26% premium compared to the closing on Friday.

In others macro the strong growth of industrial production, reinforced by the relaxation of supply problems, led to activity in the manufacturing sector of Germany at a high of 4 months in January. IHS Markit’s manufacturing PMI showed that manufacturing activity increased to 60.5 points from 57.4 points in December.

In addition, British business slowed unexpectedly this month to 11-month low, but cost pressures remained high, according to a survey that leaves the Bank of England well on track to raise interest rates next week.