© Reuters. An electronic billboard shows the German DAX index on the stock exchange in Frankfurt, Germany, on Saturday. Photograph: Reuters.
(Reuters) – European equities fell Monday as investors were cautious ahead of the results of major companies this week, with concerns over interest rate hikes and escalating geopolitical tensions also weighed on sentiment.
The European index was briefly in the green before closing 0.4% lower and prolonging losses for the fourth consecutive session.
Geopolitical concerns increased on Monday after Russia launched its largest airstrikes since the start of the war in Ukraine, in what President Vladimir Putin called revenge for the explosion on the Crimean bridge.
The Stoxx 600 index has fallen more than three percent in the past four sessions, on fears that major global central banks, especially the Federal Reserve (the US central bank), will continue to raise interest rates so aggressive to tame inflation.
Those concerns were exacerbated after Friday’s data showed resilience in the US job market in September, denting hopes that the Federal Reserve will turn around soon.
With markets largely gearing up for the Federal Reserve to hike interest rates by 75 basis points next month, investors are looking to this week’s third quarter corporate earnings reports, including from major banks, to gauge l impact of price pressures and the outlook for economic growth.
Meanwhile, the French central bank has cut its estimates of the country’s economic growth due to weak industrial activity. The French index fell by 0.5%.
Stocks in the tech sector fell 1.9%, outpacing the sector decline in the Stoxx 600 index, followed by the real estate sector. However, the losses were somewhat limited by gains in the chemicals sector and retail stocks.
ASML was the biggest loser in the index, with the chip maker’s shares tumbling after Washington imposed export controls, including a measure to deny China access to certain semiconductor chips.
Shares of other European chip makers, including Infineon and PE Semiconductor, also fell between 1 and 3%.
However, Renault (EPA 🙂 shares rose 2.4% after the French automaker and its Japanese partner Nissan said they were in “serious discussions” about the future of their alliance.
(Prepared by Rehab Alaa for the Arab Newsletter – By Mustafa Saleh)
