European stocks close lower, eyeing Ukraine, Powell and indicators

The main european scholarships closed lower on Thursday, with the market following possible negotiations between Russia and Ukraine and the second day of testimony by Federal Reserve Chairman Jerome Powell in the US Congress. In addition, investors also focused on the minutes of the European Central Bank (ECB) and on the release of macroeconomic indicators for the region and company balance sheets.

The pan-European index Stoxx 600 retreated 2.01%, to 437.36 points. In Paris, the CAC 40 fell 1.84%, to 6,378.37 points, and the FTSE 100 lost 2.57%, to 7,238.85 points, in London, with shares of BP (-4.26%), Antofagasta (-2.25%) and IAG (-7.05%) fell sharply.

European stocks accelerated declines in the last minutes of trading, following the worsening of New York, amid comments from Ukraine’s President, Volodymyr Zelensky, that if Ukraine “disappears”, other Eastern European countries will be next. Powell, on the other hand, re-emphasized the uncertainty about the effects of the war for the US. Despite the open possibilities of negotiations between Russia and Ukraine, Russian Foreign Minister Sergei Lavrov said that Moscow will continue with its military operation in Ukraine until “the end”.

Earlier, the minutes of the ECB were released. The document informs that the members of the ECB discussed the need to start withdrawing stimuli, in line with the requirements established by the forward guidance. According to ING, the minutes “show a growing willingness to start normalizing monetary policy at the March meeting”. For Capital Economics, with the geopolitical crisis, at next week’s monetary policy meeting, the ECB will emphasize that it will tread carefully out of its accommodative policy and may even increase support if necessary.

Investors also followed macroeconomic indicators from the old continent. The euro zone’s composite purchasing managers’ index (PMI) rose from 52.3 in January to 55.5 in February. The same happened in Germany and the United Kingdom. Eurostat surveys, meanwhile, showed that the euro zone’s producer price index (PPI) jumped 30.6% year-on-year in January, beating expectations.

According to Rabobank, the war between Russia and Ukraine amplified a “supply” clash that was already underway. “With its large exposure to major Russian/Ukrainian imports, Europe is more vulnerable than other major economies in the world. The forecast of a recession is always fraught with risk, but we feel that we have just come much closer to that scenario,” he said.

In Frankfurt, the DAX lost 2.16% to 13,698.40 points. In Milan, the FTSE MIB fell 2.35% to 23,958.83 points, with Telecom Italia shares down 13.99%, after earnings release. In the Iberian markets, the PSI 20 dropped 0.88%, to 5,468.22 points, and the IBEX 35, down 3.72%, to 8,011.40 points, with Telefonica (-3.21%) and Iberdrola ( -5.81%) among negative highlights.

About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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