Belgium, (Brussels Morning Newspaper) The STOXX Europe 600 index continued to drop on Thursday morning, on the path to the seventh consecutive day of decline.
The index dropped roughly 0.5% on Thursday morning and approximately 4.3% in the last six days, largely due to decline in real estate and technology stocks, according to Reuters reporting.
If losses continue to hold on Thursday, the index will be on its longest downward streak in the last four years. Markets are concerned with policies of central banks aimed at reining in inflation and warnings of recession from the World Bank and the International Monetary Fund.
US Federal Reserve officials recently warned that “the cost of taking too little action to bring down inflation likely outweighed the cost of taking too much action.”
According to recently released data, harmonised annual inflation in Germany reached nearly 11% in September, while consumer prices in Sweden increased 1.1% on monthly basis.
Susannah Streeter, senior analyst at UK financial services company Hargreaves Lansdown, noted “there is nervousness ahead of the US [consumer price index] (CPI) data, particularly given the Fed minutes yesterday showing policymakers are hyper focused on bringing down inflation with the warning higher rates will linger for longer.”
Negative trends to persist
“The effects of inflation and expected economic contractions on shoppers’ caution are expected to continue to weigh on consumer discretionary stocks, particularly retail, travel and hospitality,” she added.
Streeter warned that “a fresh front breaking out in the US-China ‘chip wars’ also risks fresh supply chain woes, particularly for the tech and motor manufacturing sectors.”
Shares of European semiconductor manufacturers dropped after US supplier of chip-making equipment Applied Materials announced export restrictions to China would bring down net sales in Q3. The company predicted that the measures will have similar effect on performance in Q4.
Shares of European semiconductor manufacturers Aixtron, ASML, ASM International and Besi dropped between 1.2% and 3.2%.
Shares of Luxembourg-based real estate company Aroundtown slid 6.3% after US financial services company Citigroup revised its stock from “buy” to “neutral.”
On the other hand, shares of Norwegian aluminium and renewable energy company Norsk Hydro went up 5.6% after the US announced it was considering restrictions on Russian aluminium imports.
