Stock markets around Europe have rebounded after falling sharply in recent days.
Germany’s DAX fell from 12,487.18 last Friday to 12,114.23 by Thursday morning, before beginning to climb. At the time of writing, the index is back to 12,306.1.
Spain’s signature index, the IBEX 35, fell from 7,517.2 last Friday to 7,227.7 early on Thursday before climbing to reach 7,330.3 at the time of writing.
Over in France, CAC 40 fell from just under 5,956.95 last Friday to skitter around 5,780 for much of the week before seeing an uptick to a current 5,875.51.
The US’s CNBC news service blamed the lacklustre performances of the indices on volatility and uncertainty around US inflation.
It wrote: “The pan-European Stoxx 600 ended down 0.1%, having bounced either side of the flatline throughout the session. Retail dropped 1.9% to lead losses, while banks were down 1%.”
Elsewhere, it said: “European markets closed lower on Wednesday, with global growth concerns dominating sentiment and investors looking ahead to Thursday’s inflation data out of the US.”
This week’s results are in marked contrast to last week’s performances. On Tuesday 4 October, the Stoxx 600 finished the day 3% higher.
CNBC wrote back then: “The higher trade in Europe comes after a rebound on Wall Street Monday and Tuesday. US markets rallied to start the new month and quarter on a positive note, as Treasury yields eased from levels not seen in roughly a decade. Monday was the best day since June 24 for the Dow, and the S&P 500′s the best day since July 27.”
Other, darker clouds may be forming over the continent, however, as Germany’s economy minister Robert Habeck said earlier this week that the country was heading for a recession.
Habeck reportedly told the press in Berlin that the economy—Europe’s largest—was set to shrink by 0.4% in 2023 rather than grow by the 2.5% prediction thrown about earlier this year. Habeck, reported Deutsche Welle, admitted that numbers were ‘bad’ and blamed the incoming financial regress on the fallout from Russia’s invasion of Ukraine.
The news could even be worse.
As Deutsche Welle wrote: “The Green Party politician pointed to models from this spring that had projected an economic downturn of 3-9% in the event Russia halted gas deliveries.”
It added: “Disruptions in gas deliveries from Russia, until now Germany’s largest supplier, have weighed heavy on German industry and have pushed food and energy prices ever higher. This in turn has also been driving inflation, which Berlin estimates will average around 8% for 2022, before dropping to 7% in 2023.”
