Europe: Stoxx 600 ends the worst week in 1 month

EUROPEAN stocks ended their worst week in a month after expectations of aggressive rate hikes stole the center stage, driving risky assets lower.

A tentative stock rebound at the beginning of the week on easing Covid restrictions in China was short-lived after residents of Shanghai’s Minhang district on Wednesday (Jun 8) were ordered to stay home for 2 days in a bid to control coronavirus transmission.

A hawkish twist by the European Central Bank on Thursday and hotter-than-expected inflation data from the US on Friday brought equities back to square one.

Investors fear that monetary tightening, coupled with the adverse economic impact of the war in Ukraine and a zero-Covid policy in China, might drive the economy into recession.

The Stoxx 600 index fell 2.7 per cent on Friday, ending the week down around 4 per cent.

Bank stocks were among the worst performers setting the most significant daily and weekly decline since the beginning of March, as concerns about economic growth overshadowed the positive impact of rising interest rates.

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Europe: Stocks drop at open, before US inflation data

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Oil stocks posted a weekly fall of just 0.5 per cent as crude prices have been rallying steadily over the last two months after refiners have shut facilities, and capacity is also tight because of reduced activity in Russia. REUTERS