Most European stock markets closed lower on Thursday as investors assimilated the latest data on inflation in Europe and the US, which showed that the price rally showed no signs of slowing down. The European markets closed at a new record high, finding support for the strong results that were announced.
In particular, the European Commission on autumn forecasts released today, sees a big slowdown in inflation in 2023, although it revised upwards its estimates for 2021 and 2022.
The Commission expects inflation, after 2.4% in 2021, to fall to 2.2% in 2022 and further to 1.4% in 2023, as energy prices are expected to gradually stabilize from the second half of next year and supply and demand imbalances to be resolved.
At the same time, the Commission expects the GDP of the Eurozone to grow by 5% this year after the recession of 2020 by 6.4%. Growth is expected to slow to 4.3% in 2022 and to 2.4% in 2023.
Yesterday the data announced in the US showed jump in annual inflation to a 31-year high of 6.2%, exceeding the estimates of analysts who expected it to reach 5.9%. At the same time, in Germany, inflation climbed to 4.5% in October, according to the country’s statistical office.
The price rally raises concerns about the possibility of central banks in the US and Europe being forced to tighten their monetary policy earlier, causing market turmoil. Analysts no longer rule out a rise in US interest rates in the summer of 2022.
The new round of corporate results announced today gave support to the European markets. In more detail, the Siemens announced a quarterly increase in revenue and orders, as its industrial activities were strengthened. The German industrial group reported a net profit of 1.17 billion euros, compared to 1.76 billion euros a year ago, although last year’s figures included about 800 million euros in discontinued operations, as a result mainly the spin-off of Siemens Energy. Siemens shares rose 2.8% today.
In addition, RWE AG announced that adjusted net income and earnings increased in the nine months, and confirmed estimates for 2021. The German energy company announced that the adjusted net profit amounted to 1.03 billion euros for the period, compared to 794 million euros a year ago.
In this climate, the pan-European index Stoxx 600 strengthened by 0.32% to a record 485.29 points, with the mining industry leading the way with a strong rise of 3.7% on the best day of the last 4 months. On the other hand, the travel and leisure sector fell by about 1.1%.
On the individual dashboard, the German DAX added 0.1% to 16,083.11 points, the French CAC 40 gained 0.2% to 7,059.55 points, while the British FTSE 100 increased by 0.6% to 7,384.18 points.
In the periphery, the Italian FTSE MIB strengthened by 0.26% to 27,633.20 points, while the Spanish IBEX 35 slipped 0.54% to 9,092.20 points.
In the individual shares, Auto Trader recorded a “jump” of 14.3%, after the British car advertiser gave strong future forecasts.
On the other hand, the British chemical company Johnson Matthey “dipped” 18.6%, after announcing plans to leave the battery business along with the departure of its CEO, while warning about the annual results.
5% drop for Burberry, though The British luxury goods company announced that it has returned to the payment of dividends, as well as an increase in pre-tax profits in the first half of 2022, with revenues returning to pre-pandemic levels.
At the macro of the day, The UK economy has lost momentum during the summer as the recovery after the lockdown has faded, while persistent supply problems and weaker consumer spending are expected to continue to hold back growth for the rest of the year.
The economy grew by 1.3% in the third quarter of the year compared to the previous quarter, according to the statistical service. The growth rate marks a vertical deterioration from the growth of 5.5% recorded on a quarterly basis from April to June.
Economists expected the UK economy to grow by 1.5% in the third quarter.
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I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
