Markets

European markets end mixed on the first day of the new half as investors search for direction

Key Points
  • The pan-European Stoxx 600 index closed the second quarter of the year on Thursday down 9% — the worst three-month period since the early stages of the pandemic in 2020 — and was down 16.6% year-to-date.
  • Global market sentiment remains gloomy as the war in Ukraine shows no sign of abating and concerns about inflation and an economic growth slowdown persist.
  • Euro zone inflation soared to a record high of 8.6% year-on-year in June, according to a first official estimate published Friday, as the war in Ukraine continued to drive up food and energy prices.

LONDON — European markets closed mixed Friday after suffering their worst quarter since the onset of the Covid-19 pandemic, as inflation and interest rate hikes continue to weigh on sentiment.


The pan-European Stoxx 600 index closed flat, having earlier posted gains of 1% in early deals. Tech stocks fell 2% to lead losses while utilities gained 3%.

Dutch chipmaker ASMI was the worst performer during Friday deals, shedding 9% to lead a broad decline for semiconductor stocks.

The biggest climber was Swedish real estate company SBB, which gained more than 9% after publishing a 2021 cash flow statement.

The European blue chip index closed the second quarter of the year on Thursday down 9% — the worst three-month period since the early stages of the pandemic in 2020 — and is down 16.6% year-to-date.

Global market sentiment remains gloomy as the war in Ukraine shows no sign of abating and inflationary pressures continue to mount, prompting central banks to embark on aggressive monetary policy tightening and exacerbating fears of a global economic slowdown.

Euro zone inflation soared to a record high of 8.6% year-on-year in June, according to a first official estimate published Friday, as the war in Ukraine continued to drive up food and energy prices.

Shares in Asia-Pacific were lower overnight with Japan's Nikkei 225 leading losses in the region, after the Bank of Japan's quarterly business sentiment survey posted a sharp decline in the April-June period.

However, China's manufacturing activity expanded at its sharpest rate for 13 months in June, boosted by resurgent output after the easing of Covid-19 lockdown measures.

On Wall Street, stocks fell Friday after the S&P 500 closed out its worst first-half performance in decades, as disappointing economic data continued to dampen market sentiment. Several profit warnings also pressured stocks.

Back in Europe, Reuters reported Thursday that the European Central Bank will on Friday begin a process of buying bonds from southern European nations, including Italy, Spain, Portugal and Greece. The ECB will reportedly use the proceeds from maturing German, French and Dutch debt, in a bid to cap spreads between their respective borrowing costs.

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