Weak start in the euro markets

European markets opened on a positive note on Wednesday after three sessions of heavy losses, only to quickly pare gains as concerns persisted about risks to growth from interest rate hikes on both sides of the Atlantic.

The message that central bankers in Europe and the US are now trying to send is that their priority is to fight inflation, despite the risks to growth from successive interest rate hikes. The global tightening of monetary policy, with central banks making their biggest interest rate hikes in several decades, has fueled serious concerns about the outlook for global growth, sending shockwaves through global stock markets.

On the board, the pan-European STOXX 600 gained 0.04% to 419.96 points.

Germany’s DAX edged down 0.1% to 12,946.28, while France’s CAC 40 lost 0.15% to 6,201.60 after data showed inflation slowed in August.

In particular, harmonized inflation according to initial data announced by the French statistics agency reached 6.5% in August, slowing from 6.8% in July and lower than analysts’ estimate of 6.7% in a Reuters poll.

In a separate statement, the statistics office confirmed an initial reading that saw France’s GDP grow by 0.5% in the second quarter.

Britain’s FTSE 100 lost 0.1%. Regionally, Italy’s FTSE MIB gained 0.3%, while Spain’s IBEX 35 fell 0.4%.

Meanwhile, energy insecurity is on the rise in Europe as Russia’s Gazprom today halted natural gas flows through Nord Stream 1 to carry out maintenance work on the pipeline. The outage is expected to last three days, but senior European officials have publicly expressed concern that flows may not be restored.