European Stocks Close Lower On Inflation, Interest Rate Outlook

(RTTNews) - European stocks closed lower on Friday as concerns around inflation and outlook for future interest rate hikes by the Federal Reserve and the European Central Bank weighed on sentiment.

The Bank of England's warning that Britain would likely enter a shallow but lengthy recession, starting in the first quarter of this year and lasting more than a year, hurt as well.

Treasury yields spiked after Richmond Fed President Thomas Barkin said it's important for the U.S. central bank to continue to raise rates to ensure if brings inflation back to the 2% target.

The pan European Stoxx 600 ended down 0.96%. The U.K.'s FTSE 100 drifted down 0.36%, Germany's DAX dropped 1.39% and France's CAC 40 ended 0.82% down, while Switzerland's SMI declined 0.78%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Ireland, Netherlands, Poland, Spain and Sweden ended with sharp to moderate losses.

Iceland, Norway and Portugal closed higher, while Russia settled flat.

In the UK market, Ocado Group plunged 11.28%. Standard Chartered Bank lost about 5% after First Abu Dhabi Bank, the United Arab Emirates' biggest lender, said it was not currently evaluating a buyout offer.

Smurfit Kappa Group, IAG, Frasers Group, IHG and ABRDN lost 4 to 4.6%.

Croda International, Endeavour Mining, Anglo American Plc, Sage Group, Whitbread, Mondi, Glencore and B&M European Value Retail ended lower by 2.5 to 3.7%.

Shell and BP surged about 3% and 2.6%, respectively. AstraZeneca gained 1.8% and BT Group climbed 1.6%, while Compass Group and Imperial Brands gained 1.16% and 1%, respectively.

In Paris, WorldLine shares tumbled more than 5%. Unibail Rodamco, Kering, Renault, Michelin, STMicroElectronics, Carrefour, Essilor, Dassault Systemes, Capgemini, Stellantis, Societe Generale and Hermes International lost 1.6 to 3.7%.

TotalEnergies rallied more than 2.5% and Thales gained nearly 2.5%. Orange surged 1.3%.

In the German market, Adidas tanked more than 11%. The footwear maker has warned of an operating loss of as much as €700 million in 2023 from the fallout over its dispute with rapper and former partner Ye. Puma lost 4.8%.

Zalando shed about 7.4%. Continental, Deutsche Bank, Fresenius, Infineon Technologies, Bayer, Brenntag, Symrise, BASF, Siemens Healthineers, Covestro, Daimler, Deutsche Post and Siemens ended lower by 2 to 3.5%.

Fresenius Medical Care shares gained nearly 2%.

U.K.'s Gross domestic product held steady in the final quarter of 2022, as expected, after shrinking 0.2 percent in the third quarter, according to data released by the Office for National Statistics.

In December, GDP fell 0.5%, following a 0.1% rise in November. In 2022, GDP grew 4%, following a 7.6% increase in 2021.