European shares suffer worst week in 2 months; tech, retail fall (updated)
06/05/2022 10:53
(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)
* STOXX 600 down 4.5% for the week
* Europe's retail index hits two-year low
* U.S. jobs grow more than expected in April
(Updates prices to close, adds comments)
By Shreyashi Sanyal and Sruthi Shankar
May 6 (Reuters) - European shares chalked up their worst
week in two months on Friday, with tech stocks and retailers
feeling the brunt of selling on the prospect of bigger interest
rate hikes to tame decades-high inflation.
The pan-European STOXX 600 index .STOXX fell 1.9%, with
retailers .SXRP down 2.0% and technology stocks .SX8P off
2.4%.
The retail index hit its lowest in two years after a string
of weak earnings reports that highlighted the fallout from
surging inflation, the Ukraine war and a fresh round of
lockdowns in China.
Adidas ADSGn.DE dropped 3.6% as it lowered expectations
for 2022 sales, with renewed COVID-related lockdowns in Greater
China hitting the German sportswear company. urn:newsml:reuters.com:*:nL5N2WY12P
Tech shares took cues from declines in growth stocks on Wall
Street, which were dragged down by elevated U.S. Treasury
yields. .N
Data showed stronger-than-expected U.S. jobs growth,
exacerbating fears of bigger interest rate hikes by the Federal
Reserve. urn:newsml:reuters.com:*:nL2N2WX261
The European Central Bank (ECB) is expected to raise
interest rates later this year, with some analysts expecting a
hike as early as July after recent record euro zone inflation
readings.
"We agree with investors that the ECB is likely to raise
interest rates by 25 bp (basis points) in July," said Jack
Allen-Reynolds, senior Europe economist at Capital Economics,
warning the worst is yet to come for the euro zone economy.
"Shortages are likely to continue weighing on activity and
higher inflation will eat further into real incomes."
Meanwhile, a recession warning from the Bank of England
weighed on UK stocks. .L
Oil & gas stocks .SXEP were among the few gainers in
Europe, up 0.5% as crude prices traded above $110 a barrel
ahead of an impending European Union embargo on Russian oil.
O/R
Among other companies reporting results, ING Groep NV
INGA.AS , the largest Dutch bank, fell 4.7% as it posted
worse-than-expected quarterly net income, including a surge in
provisions for bad loans due to its exposure in Russia and
Ukraine. urn:newsml:reuters.com:*:nL2N2WY09U
Danish medical device maker Ambu AMBUb.CO tumbled 11.8%
after providing a downbeat forecast for full-year earnings due
to supply-chain issues and hospital labour shortages.
urn:newsml:reuters.com:*:nASM000AJM
Spanish pharmaceuticals company Grifols GRLS.MC gained
9.4% as it reported the volumes of blood plasma it collected
reached pre-pandemic levels in the first quarter. urn:newsml:reuters.com:*:nL5N2WY2ED
(Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru
Editing by Sriraj Kalluvila and Mark Potter)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961
144 3740; Twitter: https://twitter.com/s_shreyashi;))