European stocks slumped on Friday to mark a third week of losses as jitters over monetary policy tightening by central banks this year and weak economic data drove global stocks sharply lower.
The pan-European STOXX 600 fell 1.8% and 1.4% on the week. Mining stocks were the worst performers of the day, losing 3.3%.
British-Australian miner Rio Tinto PLC fell 2.2%, the biggest drag on the sector, after Serbia revoked its lithium exploration licenses on environmental grounds, hurting the group’s ambition to become Europe’s largest metal supplier.
Investors are now awaiting the US Federal Reserve’s meeting next week for details on how it intends to tackle high inflation.
“There’s a lot of speculation — four, five, six U.S. rate hikes this year, a 50 basis point hike in March — that has fueled underlying market anxiety,” senior analyst Craig Erlam said. at Oanda Corp.
“We can never underestimate the ripple effects of the United States on global markets, and Europe faces its own challenges with the Omicron variant [of SARS-CoV-2] and the energy crisis,” he said, adding that markets were even starting to price in a potential tightening from the European Central Bank (ECB).
Citing those concerns, the ECB’s accounts showed policymakers arguing at a meeting last month that inflation could “easily” remain stuck above target, and that the central bank should keep the door open for a tightening of policy.
In addition, eurozone consumer prices jumped at a record pace last month, spurred by soaring energy prices and supply chain bottlenecks.
Adding to concerns, the Bank of England is set to continue its tightening cycle next month as searing inflation is well above target, according to a Reuters poll.
However, at some point investors would begin to be drawn to European markets once the period of peak inflation at the end of the first quarter and the beginning of the second quarter had passed and economic data began to improve. , Erlam said.
Airbus SE lost 2% after it said it canceled a contract with Qatar Airways for 50 A321neo jets, widening a more than $600 million dispute with the Persian Gulf carrier over the larger A350.
Siemens Energy AG plunged 16.6% after slashing its forecast as wind power unit Siemens Gamesa Renewable Energy SA warned of protracted supply chain issues, renewing pressure on the German company to it entirely takes up unity.
Siemens Gamesa fell 14%, joining Siemens Energy as the two worst performers in the STOXX 600.
Worries over supply chain disruptions also saw European auto stocks lagging their peers this week, down 4.2%.
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