European Stocks Close Lower On Inflation Worries, Geopolitical Tensions

(RTTNews) - European stocks closed lower on Wednesday, weighed down by geopolitical concerns, a surge in UK inflation, and on uncertainty about the Federal Reserve's interest rate hikes in the coming months.

The missile blast in Poland has triggered geopolitical concerns. Poland's President Andrej Duda said there are no indications that the rocket that hit Polish territory Tuesday was an intentional attack on the NATO member by Russia, as leaders in the military alliance moved to de-escalate the incident. 

"Most likely, this was an unfortunate accident," Duda told reporters in Warsaw today, adding that the missile was probably part of Ukraine's air defense.

The European Central Bank said in its Financial Stability Review that risks to the financial stability in the euro area increased amid rising inflation and low economic growth. The ECB observed that financial conditions tightened as central banks took measures to combat inflation.

Official data showed U.K. consumer price inflation reached a 41-year high in October, rising 11.1% on a yearly basis, driven by household energy and food prices. Inflation rose 10.1% in September.

Economists had expected inflation to rise 10.7% in October.

UK house prices grew at a slower pace in September, increasing 9.5% on a yearly basis, after increasing by 13.1% a month earlier, the Office for National Statistics said.

Another report revealed that factory gate inflation eased to 14.8% in October from 16.3% a month ago, with the monthly fall in petroleum prices providing a large downward contribution. Economists had forecast prices to climb 14.6%.

The pan European Stoxx 600 shed 0.99%. The U.K.'s FTSE 100 drifted down 0.25%, Germany's DAX ended 1% down, and France's CAC 40 lost 0.52%, while Switzerland's SMI dropped 0.81%.

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

Iceland and Portugal posted modest losses, while Russia and Turkiye closed higher.

In the UK market, Ocado Group, RightMove, Rolls-Royce Holdings, IAG, Hargreaves Lansdown, Dechra Pharmaceuticals and JD Sports Fashion lost 4 to 6%.

Schrodders, Harbour Energy, Intertek Group, Whitbread, Anglo American Plc, Persimmon, Smurfit Kappa Group and Next were among the other major losers.

In the German market, Daimler, Porsche Automobil, Zalando, Continental, Volkswagen, Sartorius, Deutsche Wohnen, Heidelberg Cement, BMW and Covestro lost 3 to 6.3%.

Deutsche Bank, Bayer, HelloFresh, Brenntag and Fresenius Medical Care also ended sharply lower.

Deutsche Boerse climbed nearly 3%. RWE and Allianz also posted notable gains.

In Paris, Air France-KLM ended more than 10% down. Atos plunged nearly 8%, while Valeo, Faurecia, Arcelor Mittal, Renault, Saint Gobain, Teleperformance, WorldLine, Accor, Unibail Rodamco, STMicroElectronics and Legrand ended lower by 2.1 to 5.4%.

Swiss insurer Zurich Insurance rallied more than 2% after announcing more ambitious financial targets for the next three years.