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Energy supply crisis, COVID issues weigh on European stocks

The graphic of the German share index DAX is pictured on July 7, 2022 at the Frankfurt Stock Exchange. REUTERS/Staff

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  • Nord Stream I begins annual maintenance later in the day
  • Miners lead gains on resurgent fears of COVID-19 in China
  • Danske Bank, Wizz Air Foil by results
  • US inflation data should bet on Fed tightening

July 11 (Reuters) – European stocks fell on Monday, buoyed by investor concerns over the energy supply crisis, while fresh COVID-19 cases in China and the discovery of a new coronavirus variant weighed on commodity-linked stocks.

Nord Stream I, the largest single pipeline carrying Russian gas to Germany, begins annual maintenance on Monday. Flows are expected to be halted for 10 days, but markets fear the shutdown could be extended due to the war in Ukraine and disrupt plans to stock stocks for the winter. Continue reading

The pan-European STOXX 600 index (.STOXX) broke a three-day winning streak and fell 0.8% after posting its best week in seven on Friday.

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Investors are concerned about the impact on industries across the board, said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, adding that if the contingency plans implemented by the government include rationing, growth in economies heavily impacted by Dependent on exports would really affect Russia.

A complete halt to Nord Stream I would keep European gas prices higher for longer and put pressure on the European Central Bank, which is set to hike interest rates later this month for the first time in more than a decade.

Uniper (UN01.DE), one of the first to report a drop in Russian shipments, fell 7.6% amid a dispute between Germany and Finland over the cost of bailing out the gas importer. Continue reading

All major European sectors were in the red, led by a 2.5% decline in miners (.SXPP) as metal and iron ore prices plummeted on concerns over rising COVID-19 cases in Shanghai, prompting further restraints . Continue reading

Luxury stocks, which source much of their demand from China, slipped while LVMH (LVMH.PA) lost 1.9%.

Markets have had a difficult few weeks on recession worries and the euro moving closer to parity with the dollar is adding to investors’ worries about falling earnings.

Investors will be watching US June inflation data due on Wednesday after last week’s jobs data gave stronger-than-expected support for the case for another 75 basis point hike by the US Federal Reserve this month.

“All we need now is strong US CPI push and a 75 basis point hike in FOMC later this month is viewed as the most likely outcome, greatly increasing fears that inflation may be pulled back on target will trump any concerns about slowing growth. said Stuart Cole, senior macro strategist at Equiti Capital.

Among the gains, shares in Danske Bank (DANSKE.CO) and Wizz Air (WIZZ.L) each fell 4% after gloomy forecasts. Continue reading

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reporting by Susan Mathew in Bengaluru; Edited by Sherry Jacob Phillips

Our standards: The Thomson Reuters Trust Principles.

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