Wednesday, January 19, 2022

UPDATE 3 European stocks fell below the Fed’s record high

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* STOXX 600 breaks New Year’s record

* Technical promotions mark the worst day of the month

* M&A activity gives some respite

* German inflation remains high (market updates)

JANUARY 6 () – European stocks fell to a record low on Thursday as alarming signals from the minutes of the U.S. Federal Reserve’s December meeting hit technology stocks with the possibility of rising interest rates.

The Pan-European STOXX 600 index closed down 1.3% and erased all gains from the rally, leading it to record highs in the first three sessions of the year.

On Wednesday, Fed protocols showed a tight labor market, and persistent inflation could force the U.S. Federal Reserve to raise interest rates faster than expected and begin to shrink its total assets.

European technology stocks were among the biggest declines in the region, falling 2.4 percent as the prospect of higher rates made future earnings less attractive.

OANDA senior market analyst Craig Erlam said: “There is more probability of volatility at the beginning of the year and the Fed minutes have provided that volatility, but it doesn’t show a sharp, negative change in investor sentiment.”

“I think it’s a technological waste,” he said. “Even if it lasts a day, two days, three days, I don’t think it will have a lasting effect.”

Germany’s annual inflation reportedly slowed in December, but was well above the European Central Bank’s target range. Fear of inflation, rising interest rates and the spread of the Omicron COVID option have scared investors in recent sessions.

Banks and insurance stocks generated sole income for the day, up 1.1% and 0.2%, respectively. Sectors will benefit from improved margins due to higher lending rates.

Trading in money markets in the eurozone offered investors an increase in interest rates from the European Central Bank in early October and another in December.

In addition to the concern, a spokesman for the French government said that the “supersonic” growth of COVID-19 infection would continue in the coming days and that there were no signs of a reversal of the trend.

In some good news, the data showed that higher demand in November led to more growth than expected in German industrial orders.

Societe Generale’s car leasing division grew 8.4 percent after ALD agreed to buy rival LeasePlan for 4.9 billion euros ($ 5.5 billion) as the rental market shifted to electric vehicles. scale

French store Carrefour rose 6.3% to the top of the STOXX 600 rating, following news of a new offer offered to retailer by rival Auchan. (Anisha Sirkar’s interview in Bangalore; edited by Shounak Dasgupta, Subhranshu Sahu, William McLean)

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