The main European stock markets closed in the red on Thursday, with investors trying to assimilate the monetary policy decisions of both the European Central Bank and the Bank of England amid persistent inflationary pressures.
In particular, the The ECB today confirmed the decisions received at the monetary policy meeting last December, reiterating that in the first quarter of 2022 it will conduct net purchases under the Pandemic Emergency Program (PEPP) at a slower pace than in the previous quarter.
At the same time, it confirmed that it would stop net asset purchases under the PEPP program at the end of March 2022.
The ECB’s decisions came in the wake of data released yesterday by Eurostat and showed a jump in annual inflation to new record at 5.1% in January, from 5% in December 2021.
Meanwhile, the assessment of the European Central Bank that inflation will begin to decline in 2022 after the rally of previous months was reiterated today by the President of the Central Bank, Christine Lagarde, acknowledging that Inflation will remain higher than originally estimated something that has caused concern to the Board. the bank’s.
For its part, the Bank of England proceeded to increase its interest rates by 25 basis points, at 0.5%, with half of the bank members, however, being in favor of a larger increase by 50 bp. in order to curb inflation.
In this climate, the pan-European index Stoxx 600 recorded a “dive” of 1.76% to 468.63 points, with the technology sector slipping by 3.4%, recording the largest losses since disappointing fourth quarter results announced by Meta (Facebook), and the weaker than expected guidance. Its share falls more than 20% in today’s Wall trades.
In the individual dashboard, the German DAX The French fell 1.57% to 15,368.47 points CAC 40 lost 1.54% to 7,005.63 points, while the British FTSE 100 fell 0.71% to 7,528.84 points.
On the periphery, the Italian FTSE MIB recorded losses of 1.09% to 27,088.96 points and the Spaniard IBEX 35 slipped 0.27% to 8,689.40 points.
In the individual sharesBritish catering giant Compass Group rose about 4% after a strong earnings report, with quarterly earnings returning to near pre-pandemic levels.
The French Publicis Groupe, the third largest advertising company in the world, strengthened by 0.52% after the forecast for growth of organic sales by 4% to 5% this year and the announcement of record profits for 2021.
The Shell stock gained 0.39% after announcing the highest quarterly profits in the last eight years and the decision of the energy giant to increase its dividend.
Near the “bottom” of the European blue chip index was the Swedish bearing and seal manufacturing company SKF, which lost more than 9%.
Macro
At the macro level, economic growth in the Eurozone slowed further in early 2022, as shown by the latest PMI data from IHS Markit, as the rapid spread of the coronavirus mutation put pressure on economic activity, especially in services.
In particular, the composite PMI, which covers services and manufacturing, fell to 52.3 points in January from 53.3 points in December.
At the same time, Eurostat data showed that producer prices jumped 2.9% in December 2021 compared to November 2021, both in the Eurozone and in the EU. in a new indication that upward pressure on prices will continue.
Compared to December 2020, prices rallied 26.2% in both regions, with a boost from the energy sector.
Source: Capital
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