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European stocks tumble on recession fears

Xinhua
06 Jul 2022, 04:30 GMT+10

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Amid the Ukraine crisis, global inflationary pressures have intensified sharply and the economic outlook for the UK and globally has "deteriorated materially," the Bank of England (BoE) said in a report published on Tuesday.

LONDON, July 5 (Xinhua) -- Major European stocks ended lower on Tuesday as a fresh round of recession fears weighed on investors globally.

In London, the FTSE 100, the leading benchmark for blue-chip companies listed in the United Kingdom (UK), ended the session down 2.87 percent at 7,025.47 on Tuesday.

Amid the Ukraine crisis, global inflationary pressures have intensified sharply and the economic outlook for the UK and globally has "deteriorated materially," the Bank of England (BoE) said in a report published on Tuesday.

Risky asset prices have fallen markedly since the beginning of the year, according to the BoE report. UK, U.S. and European equity indices are down 6 percent, 21 percent and 19 percent, respectively, in the year to date, it added.

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The Paris CAC 40, a benchmark French stock market index, on Tuesday plunged 2.68 percent, or 159.69 points to 5,794.96, and the German benchmark DAX index fell by 2.91 percent, or 372.18 points to 12,401.20.

Market intelligence company S&P Global said on Tuesday that its seasonally adjusted Eurozone PMI Composite Output Index registered 52.0 in June, signaling the slowest rate of expansion in the current 16-month sequence as demand stalled.

"It is not a secret that the eurozone economy is not doing great, with the outlook also looking bleaker by the day," Fawad Razaqzada, a market analyst for the UK financial services provider City Index, said on Tuesday.

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Also on Tuesday, the euro tumbled to a 20-year low against the U.S. dollar. The weakness is driven by rampant inflation, concerns over energy and rising borrowing costs, according to Razaqzada.

Brent crude, a global benchmark, plummeted on Tuesday as well. Fears about the health of the world economy are circulating and that explains the major declines in stocks and energies, David Madden, a market analyst at London-based Equiti Capital, commented.

"Worries about rising inflation, higher interest rates and slower economic growth are hanging over the markets. Sentiment across the board is slowly souring by the day as there are more and more headlines of a possible recession," Madden added.

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