All European stocks fell sharply this Monday in light of recession expectations, high inflation and the potential rate hike
The stock started the week with a significant drop, losing 2% in the opening steps of Monday’s session, pushing the Ibex-35 to around 7,800, the lowest level since March when the Russian invasion of Ukraine began. .
The bleak economic outlook hovering over the eurozone is weighing down investors’ expectations in a week that will be pivotal because of the meeting the European Central Bank (ECB) plans to hold this Thursday, when it could decide on a new one. increase in interest rates between 0.5 and 0.75 extra points. Already in July, it raised the official price of money in the eurozone to 0.25%, after six years with rates of 0%.
In fact, it’s banking stocks that are losing the most ground this Monday. Specifically, Sabadell lost 2.9% of its value, while Santander lost 2.9%, BBVA 2.8% and Bankinter 2.7%, while CaixaBank lost 2.5%.
The rest of the European stock markets also started the week with heavy losses, even above 2%. Investors are fleeing risk amid dwindling activity in many developed countries, high inflation and rising expectations of interest rate hikes. In this context, the euro has fallen below 99 cents against the dollar.
The Ibex ended Friday with a gain of 7,900 points after a string of 12 consecutive losing sessions. It opens with a drop of more than 1.5% and is below 7,800 points.
Link Securities point out that central banks are expected to “continue to act vigorously in their bid to moderate high inflation, particularly the ECB, which could even push a 75 basis point hike in its benchmark interest rates, signaling a move. large size that we believe is not fully discounted by the markets».
In addition to monetary policy decisions, the energy crisis in the European Union (EU) has been exacerbated by the cut-off of Russian gas through the Nord Stream gas pipeline, raising fears of fuel shortages in the winter. The Kremlin on Sunday blamed European politicians for keeping the main gas pipeline closed, saying economic sanctions against Russia have made it difficult for Gazprom to maintain the pipeline.
Oil ministers of the OPEC+ Alliance, led by Saudi Arabia and Russia, are analyzing the state of the crude oil market in a telematics conference today, amid information about a possible production cut. The price of Brent oil, a benchmark in Europe, is rising by more than 2% to above $95 per barrel.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
