European stock markets lose 1% dragged down by declines on Wall Street | Economy

 European stock markets lose 1% dragged down by declines on Wall Street |  Economy

View of the Madrid Stock Exchange shortly after the opening of the session this Thursday.Vega Alonso del Val (EFE)

The collapse of Wall Street the day before has taken its toll on European markets. The stock markets of the Old Continent have closed this Thursday in red: the Ibex 35 has lost 0.83%, although it has managed to save 8,400 points. Frankfurt has fallen by 0.85%; Paris 1.26%, and London 1.82%. Investors are thus reversing Tuesday’s rebound as they fear business results will suffer in an environment marked by rising interest rates in the United States, high inflation and uncertainty over the war in Ukraine.

Among the members of the Spanish selective, Ferrovial, Inditex and Aena have been the most affected values, leaving more than 2%. Instead, renewables have managed to save face, with Siemens Gamesa and Solaria advancing more than 4%. High prices for consumer goods, gas and energy continue to fuel fears of flagging economic growth. The latest bad news in this regard has come this week, when the rise in the CPI in the United Kingdom in April to 9% was known. The Renta 4 analysis house recalls that the Bank of England itself does not expect to see the price ceiling until October, at levels close to 10%. On the positive side, the plans announced by Shanghai to resume activity and gradually end the confinement could serve as a catalyst in the coming days.

Wall Street, after suffering its worst day in almost two years on Wednesday, extends the declines. In the first bars of the session, the Dow Jones, the S&P 500, and the Nasdaq technology index —the most affected the day before— fell around 1%. In addition to the warnings of the US Treasury Secretary, Janet Yellen, about a potential entry of the world economy into a period of stagflation, the results of the retail distribution company Target caused an avalanche of sales in the US stock markets, as they warn. from Link Securities.

The company has reported $1 billion in profit between January and March, about half of what it made in the same period in 2021, well below expectations. Likewise, the profits of Walmart, the first retail company by turnover in the United States, fell 25% in the first quarter of the year, due to the pressure that inflation exerted on the firm’s operating costs. “The negative impact on the margins of some of the companies in Retail sale The most important in the US has been the push that investors needed to fall off the horse and assume that the context of rising prices, together with a very restrictive policy of a Federal Reserve determined to curb inflation, will have a negative impact on the economy ” , pointed out Patricia García, an analyst at MacroYield.

The attention of stock market operators is once again focused on the impact of rising prices on consumer spending, who are faced with increasingly reduced purchasing power. In addition, the market continues to value the possibility of further monetary tightening, as recently promised by the Federal Reserve, which is willing to raise interest rates as much as necessary to put an end to rising inflation.

Asian stocks have also been punished. The Hang Seng, the benchmark index of the Hong Kong Stock Exchange, closed this Thursday with losses of 2.54%, dragged down by the heavy losses that technology values ​​have discounted. The digital giant Tencent has revealed this Wednesday that its profits for the first quarter had been cut in half. The Japanese Nikkei has also concluded the session dyed red, with a drop of 1.89%. In the commodity market, both Brent -the benchmark for Europe- and West Texas Intermediate remain above 100 dollars.

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