European shares fell on Wednesday, as fears about a global recession overshadowed recent optimism about China reopening after months-long lockdowns, with investors looking ahead to a meeting of major central bank heads for clues on policy outlook.
The continent-wide STOXX 600 index dropped 0.9%, snapping a three-day rally following a dour Wall Street session overnight on weak U.S. consumer confidence data. [.N]
Spain’s blue-chip index IBEX fell 1.3%, as preliminary data showed Spanish 12-month inflation accelerated to a higher-than-expected 10.2% in June, the first time since April 1985, from 8.7% in the previous month.
“The market is still panicking about inflation and growth weakening and as a result of that every bounce is short lived,” said Chris Beauchamp, chief market analyst at online trading platform IG.
“You have got poor data across the board, everything still says that people are in that sort of offloading phase for risk assets. So these short rallies catch a few people out and then turn around again.”
The STOXX 600 has shed more than 15% this year and set for its worst quarter since the COVID-19 led carnage in 2020, as uncertainty about Russia-Ukraine war, soaring price pressures and central bank policy moves to tame it dampen risk appetite.
Eurozone’s consumer confidence data for June is due at 0900 GMT later in the day, followed by an early reading on German inflation at 1200 GMT.
European Central Bank President Christine Lagarde, U.S. Federal Reserve Chair Jerome Powell and Bank of England Governor Andrew Bailey will speak at a panel discussion at the annual ECB forum on central banking at 1230 GMT.
The ECB is widely expected to follow its global peers by raising interest rates in July for the first time in a decade to cool accelerating inflation, though economists are divided on the magnitude of any such hike.
Among stocks, Europe’s real estate sector and automobiles led declines with 2.5% and 2.1%, respectively.
Miners slipped 1.6%, as a recent rally in metal prices on hopes of resurgent demand from China faded. [MET/L]
Just Eat Takeaway.com slumped 17.0%, after Berenberg initiated its coverage on the Europe’s biggest online meals ordering company’s stock with a “Sell” rating.
H&M gained 5.0% after the world’s second-biggest fashion retailer reported a forecast-beating 33% increase in quarterly profit, as shoppers flocked to its stores in the aftermath of the pandemic.