European stocks slumped on Friday as fears of rising inflation and stronger rate hikes dampened sentiment despite the release of better-than-expected April jobs reports in the US.
“Stocks were hoping for a quiet end to the week, with some breathing room after all the volatility, but it wasn’t to be,” he said I G Chief Markets Analyst Chris Beauchamp.
“Investors remain concerned about the possibility of a recession in the US and elsewhere caused by tightening monetary policy. The earnings season has done little to allay concerns about squeezed consumer spending, causing markets to lag again.”
The pan-European Stoxx 600 index fell 1.91% to 429.91. Oil & gas stocks bucked the trend as crude prices traded above $110 a barrel.
Germany’s Dax, meanwhile, fell 1.64% to 13,674.29 and the Cac-40 fell 1.73% to 6,258.36.
Bunds continued to fall, pushing their yields up nine basis points to 1.135%.
The Dow Jones Industrial Average plunged more than 1,000 points and the tech-heavy Nasdaq fell almost 5% overnight, erasing Wednesday’s gains as investors feared the Federal Reserve’s rate hike this week would not be enough to combat raging inflation.
Shares of the German sports equipment manufacturer Adidas fell 4% after lowering expectations for 2022 sales as renewed Covid-related lockdowns in Greater China continue to affect trade.
Dutch bank ING fell 5% as it reported worse-than-expected quarterly profit, including a rise in provisions for bad loans from its exposure to Russia and Ukraine.
Danish manufacturer of medical devices ambu slumped 12% after slashing annual earnings guidance due to supply chain issues and hospital labor shortages.
Norwegian renewable energy company Scatec plunged 18% as the company said first-quarter results were impacted by Russia’s war in Ukraine, broader geopolitical uncertainty and seasonality in the Philippines.