European Stocks Close Broadly Lower As Growth Worries Weigh

European stocks closed broadly lower on Thursday weighed down by concerns about a potential debt default in the U.S., weak economic outlook, and prospects of further policy tightening by central banks.

The pan European Stoxx 600 ended 0.32% down. The U.K.’s FTSE 100 declined 0.74%, Germany’s DAX shed 0.31% and France’s CAC 40 lost 33%, while Switzerland’s SMI ended lower by 0.51%.

Among other markets in Europe, Austria, Belgium, Finland, Iceland, Norway, Poland, Portugal, Russia and Spain ended weak.

Czech Republic, Greece, Ireland and Netherlands closed higher, while Denmark, Sweden and Turkiye ended roughly flat.

In the UK market, Imperial Brands, DCC, Kingfisher, Vodafone, British American Tobacco, BT, BP, Johnson Matthey, Intertek, SSE, Royal Dutch Shell, Pearson and Lloyds Banking lost 2 to 4.1%.

Carnival rallied nearly 5%. Centrica, Scottish Mortgage, Flutter Entertainment, Admiral Group, Halma, Rolls-Royce Holdings, Ferguson, Ashtead, Spirax-Sarco Engineering, Bunzl and HSBC Holdings gained 1 to 2.5%.

In the German market, Deutsche Telekom, Puma and RWE lost 2.5 to 2.8%. Infineon, Zalando, Fresenius, Sartorius, Deutsche Boerse, Covestro, Fresenius Medical Care, BASF, Vonovia, Bayer and Daimler Truck Holding ended lower by 1 to 2%.

Siemens Energy surged 1.5%. Merck, Siemens, Qiagen, Munich RE and Siemens Healthineers posted moderate gains.

In Paris, Teleperformance ended 5.5% down. TotalEnergies and Vivendi both shed more than 3%. Capgemini, Sanofi and Engie lost 2 to 2.7%. Carrefour and Publicis Groupe also ended notably lower.

Schneider Electric, Dassault Systemes, STMicroElectronics and Hermes International gained 1.5 to 2.3%. Legrand, Societe Generale and LVMH gained 0.7 to 1.2%.

German economy entered a technical recession in the first quarter of this year as household consumption slumped amid the rising cost of living that is fueled by high inflation, revised data from the statistical office Destatis showed.

Gross domestic product declined a seasonally and calendar adjusted 0.3% from the fourth quarter of last year, when the economy shrunk 0.5%. The initial reading was nil growth. On a year-on-year basis, GDP shrunk 0.2%, reversing a similar size growth from the previous three months.

Germany’s consumer confidence will strengthen in June as households were more positive about their income growth amid the hope of a rise in wages and salaries resulting in a less severe loss of purchasing power. The consumer confidence index rose to -24.2 in June from a revised -25.8 in May, survey results from the market research group GfK showed.

French manufacturers’ confidence decreased further in May to reach its lowest level in more than two years as the trend in past production and the level of overall order books worsened, survey results from the statistical office Insee showed.

The manufacturing confidence index dropped to 99 in May from 101 in the previous month. Meanwhile, the score was expected to remain stable at 101.

After a decline, UK retailers expect sales to stabilize in June on improving consumer sentiment, survey data from the Confederation of British Industry showed. The retail sales balance fell to -10% in May from +5% in April, the Distributive Trades Survey showed. However, retailers expect sales to stabilize next month.

UK car production rose for the third successive month in April, supported by strong export demand along with continued ease in global supply chain shortages, particularly with regard to semiconductors, data from the Society of Motor Manufacturers and Traders, or SMMT, showed. Car production climbed 9.9% year-on-year to 66,527 units in April, driven by a 14.7% surge in exports.

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