European Stocks Edged Higher On Friday Following A Brutal WeekJune 17, 2022
European stocks might be set for sharp weekly losses despite edging higher on Friday. The pan-European STOXX 600 index gained 0.8% through trade volatility. However, its weekly decline could reach 4%. That would be its worst performance since early last month.
Global Stock Markets Are Set For Their Highest Weekly Losses Since March 2020.
Investors are increasingly worried that the world’s financial markets are about to plunge into a recession. Their worries rose following the rate raise by Switzerland’s apex bank. The Swiss national bank’s rate rise followed similar actions by central banks of the UK and the US.
A top-level executive with Hargreaves Lansdown, Susannah Streeter, noted, “there might be some temporary relief following the worst feeling that hit investors during the week.” Streeter added that it is unlikely that many investors will sleep away the fact that a bleak economic future lies ahead.
Between January and May, the STOXX 600 has lost nearly 17%. The decline in economic outlook due to rising prices and aggressive rate raises have contributed to this decline. Most regional markets are 20% off their recent all-time highs, otherwise known as a bear market.
The technology, retail stocks, and the oil & gas sectors were the three worst-hit European sectors during the week. Bank of America’s weekly report for this week revealed that there had been zero outflows from stocks for each $100 inflows for over two years. Thus, suggesting that there is no reprieve for equities yet.
There have been outflows from European markets in the last 18 weeks. Tesco stocks were down 0.7% following the company’s report that consumers’ behavior is starting to change. Britain’s largest retailer cited increased inflationary pressure as the reason for this change.
Stocks of Santander (Spain’s top lending firm) were up by 0.5% after the company announced the departure of long-time CEO, Jose Antonio Alvarez. Hector Grisi replaced Alvarez.
Glencore (a mining and trading firm) listed on the London stock exchange rose 3.4% after adjusting its half-year profit expectations. The company announced that the gross profits from its trading division would be over $3.3B.
Tokyo Stocks’ Sharp Decline On Friday
Following a sharp decline in Tokyo stocks on Friday, the Nikkei closed at a 30-day low. Monetary tightening by the US and top Europe central banks had created fear of a negative effect on the world’s financial markets.
Hence, there were intense selloffs in the international market in the last 24 hours. The benchmark Nikkei index recorded its biggest 7-day decline since march 2020 after losing 1,861 points in five trading sessions on Friday.
The Yen dipped shortly against the USD following Japan’s announcement of not tightening its monetary policy yet. Their move is in sharp contrast with other top global economies. Since then, the USD/JPY forex market has been extremely volatile for most of the day.