European Stocks Close Broadly Lower On Recession Fears

(RTTNews) - Despite coming off early lows, European stocks closed on a weak note on Tuesday as fears of a global economic recession due to constantly rising interest rates weighed on sentiment.

The Bank of Japan's surprise policy shift hurt as well. The BoJ said it would review its yield curve control policy and widened its target band for interest rates - a move that analysts said would allow long-term interest rates to rise more.

Hawkish comments on interest rates from former Federal Reserve official William Dudley also fueled worries about a worldwide recession.

Federal Reserve, Bank of England, the European Central Bank and Swiss National Bank, all raised their interest rates last week.

Investors were also reacting to comments by ECB policymaker Peter Kazimir that the "monetary policy should tighten at a stable pace."

The pan European Stoxx 600 drifted down 0.40%. Germany's DAX and France's CAC 40 ended lower by 0.42% and 0.35%, respectively. The U.K.'s FTSE 100 edged up 0.13%, while Switzerland's SMI fell 1.06%.

Among other markets in Europe, Austria, Greece, Iceland, Ireland, Netherlands, Norway, Russia and Sweden ended weak.

Czech Republic, Denmark, Finland, Poland, Portugal, Spain and Turkiye closed higher, while Belgium settled flat.

In the UK market, Sage Group, Hargreaves Lansdown, Airtel Africa, JD Sports Fashion, Schroders, Scottish Mortgage, Ocado Group, IAG, Segro, RS Group, Land Securities Group, Frasers Group, Coca-Cola HBC and Intertek Group lost 1 to 3%.

Antofagasta climbed nearly 3.25%. Centrica surged 2.6%, while Glencore, Endeavour Mining, HSBC Holdings, Beazley, Lloyds Banking Group and Natwest Group gained 1 to 2%.

In Paris, Unibail Rodamco dropped nearly 5%. Kering, Renault, Engie, Dassault Systemes, Stellantis, Alstom, Publicis Groupe, Danone, Legrand and L'Oreal lost 1 to 4%.

Societe Generale rallied 2.1%. BNP Paribas and TotalEnergies both gained nearly 1.5%. Credit Agricole surged 1.2%.

In the German market, Siemens Healthineers dropped more than 4%. Deutsche Wohnen, Vonovia, Adidas, Volkswagen, Zalando, Symrise, SAP, Porsche Automobil and Merck lost 1 to 3.3%.

Deutsche Bank climbed nearly 5.5%. Bayer gained about 1.2%.

In economic releases, German producer price inflation eased more-than-expected in November to reach its lowest level in nine months amid a slowdown in the price growth of energy, data from Destatis showed.

Producer prices climbed 28.2% year-over-year in November, slower than the 34.5% surge in October. That was also slower than the 30.6% rise economists had expected.

Further, the latest inflation rate was the weakest since February, when prices had risen 25.9%.

Confidence among German exporters improved slightly in December, as they expect better demand conditions for the automotive and electrical sector, survey results from the ifo Institute showed.

The ifo Export Expectations index rose to a 6-month high of 1.6 points from 0.9 points in November.

German manufacturers are cautiously optimistic as they head into the New Year, ifo said.

The euro area current account deficit narrowed sharply to the lowest in eight months in October, underpinned by the improvement in foreign trade.

The current account deficit totaled EUR 0.4 billion versus a EUR 8.06 billion shortfall in September, data published by the European Central Bank showed.

Switzerland's exports declined for the second consecutive month in November, primarily caused by a plunge in demand for chemicals and pharmaceuticals, data from the Federal Customs Administration showed.

Exports decreased by a real 2.8% monthly in November, following the 2.2% fall in the previous month. Imports also logged a negative growth of 0.6% over the month, after a 0.3% drop in October.

In nominal terms, exports plunged 9.2% from a month ago, while imports rebounded by 1.4%.