• analysiswatch

​European Stocks Weaken; IAG Posts Another Hefty Loss


May 06, 2022 03:57AM ET


By: AnalysisWatch


European stock markets traded softer on Friday, following the broader sell-off on Wall Street overnight, as investors feared aggressive central bank tightening would severely slow economic growth.


At 4 a.m., Germany's DAX traded 0.8% lower, France's CAC 40 fell 1.1%, and the U.K.'s FTSE 100 dropped 0.5%.


German industrial production slumped 3.9% in March, highlighting the difficulties the eurozone's largest economy is facing in coping with pandemic constraints and the war in Ukraine.


The last time there had been a sharper decline was at the start of the coronavirus crisis in April 2020.


Despite these signs of slowing growth, the head of Germany's Ifo Institute said Friday that the European Central Bank would need to raise interest rates quickly to combat high inflation in the eurozone.


Earlier, the U.S. Federal Reserve raised its key interest rate by half a point on Wednesday, the most in two decades, and the Bank of England followed suit on Thursday with a 25 basis point increase, to its highest level since 2009.


All three major Wall Street benchmarks closed sharply lower Thursday, with the Dow Jones Industrial Average falling more than 1,000 points, or 3.1%, for its worst one-day performance since October 2020.


The tech-heavy Nasdaq Composite fell 5%, posting its biggest one-day percentage drop since June 2020 and its lowest level since November 2020.


In corporate news, IAG shares slumped 9% after the parent of British Airways and Iberia posted another sizable operating loss of €731 million ($770 million) in the first quarter, caused by the winter wave of Omicron variant COVID-19, which also led to widespread staff shortages.

0 views0 comments