The Business Times

Europe: Shares slide as recession fears grip global markets

Published Sat, Sep 17, 2022 · 06:00 AM

EUROPEAN shares slid 1.6 per cent on Friday (Sep 16) as recession warnings from 2 major global financial institutions and bets of a large interest rate hike from the US Federal Reserve next week knocked sentiment.

The declines sent the continent-wide Stoxx 600 to its worst week in 3 months, down 2.9 per cent.

Except real estate stocks, all major sectoral indexes were in negative territory, with industrials, healthcare and financials dragging the most.

Delivery and logistics firms tumbled after US peer FedEx on Thursday withdrew its financial forecast, fanning fears of a global demand slowdown.

Shares of Deutsche Post, Kuehne & Nagel, DSV Panalpina and Royal Mail slumped between 4 per cent and 8 per cent.

The World Bank said late on Thursday that the global economy might be inching towards a recession as central banks aggressively tackle sticky inflation. The International Monetary Fund said it expected a slowdown in the third quarter.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

VIEW ALL

“(The World Bank) highlighted that because the new tightening polices are synchronised across a number of countries,” Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, wrote in a note.

“The effects of these interest rates could be compounded and magnified, leading to a steeper-than-expected slowdown in global growth.”

All eyes are now on the US Federal Reserve, which is expected to deliver its third 75-basis-point hike of the year after raising by 225 basis points so far in 2022.

Ailing German gas importer Uniper SE fell 1.7 per cent as it struggled to keep up with costs after the sudden halt of a major natural gas pipeline by Russia earlier in the month.

The Stoxx 600 has shed 1.7 per cent in September so far, heading for its second straight monthly decline, as investors fret over soaring prices and an energy crisis in the region.

UK’s FTSE 100 index fell 0.6 per cent after data showed retail sales fell much more than expected in August, in another sign that the British economy is sliding into recession. But the exporter-heavy index fell the least across Europe as the pound weakened. REUTERS

KEYWORDS IN THIS ARTICLE

READ MORE

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to  t.me/BizTimes

Capital Markets & Currencies

SUPPORT SOUTH-EAST ASIA'S LEADING FINANCIAL DAILY

Get the latest coverage and full access to all BT premium content.

SUBSCRIBE NOW

Browse corporate subscription here