Stock markets: European stocks dip on German recession fears
15:52, 14 December 2021
European stocks inched lower Tuesday as Germany, one of region’s strongest economies, totters on the verge of a winter recession on the back of supply chain constraints and Omicron concerns. The German economy may contract c.0.5% in the last quarter of the year and remain subdued for the first part of 2022, the Ifo Institute for Economic Research said in a forecast.
UK stocks traded mostly flat as positive jobs growth data in November highlighted the fact that the British economy and job market successfully navigated furlough schemes and slumps due to the coronavirus pandemic.
Overnight in Asia, Hong Kong’s Hang Seng (.HK50) index dipped.
The US S&P 500 index is lower.
What’s interesting today: Investors are looking forward to the Bank of England’s meeting later this week, which should provide more insight on monetary policy for the rest of the year as well as the central bank’s outlook for 2022, including any interest rate hikes.
Why are European stocks down today?
Germany on the verge of winter recession: Germany was deemed to be susceptible to a winter recession on Omicron woes and supply chain constraints.
What is your sentiment on UK100?
- What this means: A recession in Germany has the potential to spill over onto other smaller and economically more unstable countries in the European Union resulting in weaker economic growth and slowing demand. This, coupled with Omicron’s already widespread effects could further slow the recovery of financial markets.
Stock markets: key highlights
- The FTSE 100 (.UK100) index inched up 0.38% to 7258.7 points
- The Euro Stoxx 50 (.EU50) index declined 0.56% to 4159.7 points
- Germany’s DAX (.DE40) index dipped 0.08% to 15608.5 points
- France’s CAC 40 (,FR40) index traded flat at 6943.1 points
- The leading sectors in the UK were consumer durables and process industries, whereas technology services and mining suffered
- The US S&P 500 is down 1.13% to 4,616.26.
- The CBOE Volatility Index, or VIX (.VIX), a measure of expected fluctuations in US stocks increased to 20.99, as market anxieties increased
- The US dollar index inched up to $96.49
- The US 10-year bond yield index dropped to 1.44%
Top stock gainers: UK and Europe
- The best performing companies in the UK were Berkeley Group Holdings, Smith and British American Tobacco
- Berkeley Group Holdings last week revised its guidance on the back of an optimistic outlook for the next four years
- British American Tobacco shares rallied following a stable second half of the year and promising dividend yield
- The top stock gainers in Europe were Kone, Siemens and Linde
- Siemens is partnering with LG Energy Solution to deliver battery manufacturing intelligence
- Linde shares rose after the engineering and natural gas company was reported to be considering a deal with a bioLNG plant from Australia
Top stock losers: UK and Europe
- The worst performing companies in the UK were Darktrace, Scottish Mortgage Investment Trust and Polymetal International
- Darktrace this month announced a 30% increase in ransomware attacks
- Scottish Mortgage Investment Trust reported last month investments in battery recycling and blockchain companies
- Polymetal International shares struggled to recover from the chip shortage that the company had warned of earlier
- The top stock losers in Europe were ASML NV, Kering and ING Group
- ASML NV shares suffered following speculations of insiders selling approximately €7.7m worth of shares
- Kering shares suffered after the group faced increasing pressure in the eyewear line following LVMH’s heightened interest in the sector
Stocks news: what you need to know today
- Data Patterns launches an IPO targeting anchor investors
- BT Group shares dip after Altice increased its stake but didn’t make an offer
- Omega Diagnostic shares rise on the back of Omicron testing success
- MIND Technology shares rally on the back of US Navy deal
Read more: European fund managers are bullish on the outlook
Markets in this article