European Stocks Close Sharply Lower On Recession Fears

(RTTNews) - European stocks tumbled on Tuesday as recession fears triggered a sell-off. Investors digested some weak economic data from the Eurozone, and the Bank of England's Financial Stability Report that showed the growth outlook has worsened.

Signs of a flare-up in COVID-19 cases in China also added to global growth worries and offset signs of an easing in U.S.-Sino tensions.

Sharply lower oil prices weighed on energy stocks, contributing substantially to the weakness in European markets.

The outlook for the UK as well as global economies deteriorated materially but domestic vulnerabilities that can amplify economic shocks remain broadly at their pre-pandemic levels, the Financial Policy Committee of the Bank of England said Tuesday.

The steep rises in energy and other commodity prices exacerbated inflationary pressures arising from the pandemic, and further disruption of supply chains, the bank said in its Financial Stability Report.

The pan European Stoxx 600 dropped 2.11%. The U.K.'s FTSE 100 drifted down 2.86%, Germany's DAX fell 2.91% and France's CAC 40 declined 2.68%, while Switzerland's SMI ended 1.65% down.

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

Denmark edged down marginally. Russia closed higher, while Iceland ended flat.

In the UK market, Harbour Energy tanked nearly 10%. Rolls-Royce Holdings, Shell, Anglo American Plc, Glencore, BP, Antofagasta and Centrica plunged 7 to 9%.

Fresnillo and Entain lost 6.7% and 6.5%, respectively. Aviva, Prudential, Barclays, Standard Chartered, M&G, Associated British Foods, IAG, Natwest Group, Rio Tinto and Melrose Industries tumbed 4 to 6%.

Dechra Pharmaceuticals rallied 5.3% after RBC upgraded the British veterinary products company's stock to "outperform."

Segro, Croda International Group and Ocado Group gained 2.6 to 3.5%. Spriax-Sarco Engineering, RightMove, Halma, Sainsbury J and 3I Group also ended notably higher.

In the French market, Faurecia and Atos both ended lower by over 8%. AXA, Valeo, Veolia, Thales, Renault, Publicis Groupe, WorldLine, Societe Generale, Air Liquide, ArcelorMittal, Airbus Group, Air France-KLM and Vinci declined 4 to 7%.

Credit Agricole, Michelin, Bouygues, Carrefour, BNP Paribas, LVMH, STMicroElectronics and Safran lost 2 to 4%.

In Germany, MTU Aero Engines plummeted nearly 8%. Munich RE, BASF, HeidelbergCement, Continental, Zalando, Covestro, Volkswagen, Daimler, Porsche Automobil, Allianz and Deutsche Bank shed 4 to 7%.

Siemens, Bayer, Infineon Technologies, Fresenius, BMW and Siemens Healthineers also declined sharply.

Sartorius climbed nearly 3%. Merck gained about 1.5%.

In economic news, the eurozone private sector expanded at a slower pace in June as the manufacturing production logged its first fall in two years on one side and the weaker growth in services activity on the other, final survey results from S&P Global showed.

The final composite output index fell to 52.0 in June from 54.8 in the previous month. The reading was slightly above the initial estimate of 51.9. The score signaled the slowest pace of expansion in the current 16-month sequence of growth.

The services Purchasing Managers' Index dropped to 53.0 in June from 56.1 in May. The flash score was 52.8. Although the reading signaled the weakest growth since January, the sector sustained its upturn.

The German private sector lost more growth momentum in June. The S&P Global/BME final composite output index ticked down to 51.3 in June, in line with estimate, from 53.7 in May. The latest score was the lowest since the fractional contraction seen last December.

The services PMI came in at a five-month low of 52.4 in June versus 55.0 in May. The final score matched the flash estimate.

France's private sector expanded at the slowest pace in 14 months in June. The final composite output index registered 52.5 in June, well down from 57.0 in May and the flash score of 52.8.

The services PMI slid to 53.9 in June from 58.3 in May. The flash reading was 54.4.

France's industrial production remained unchanged in May, after falling in the previous three months, data published by the statistical office Insee showed.

Industrial production showed no variations in May, after a revised 0.3% fall in April. Meanwhile, economists had forecast a rebound of 0.2%. Manufacturing output recovered 0.8% monthly in ay, following a 0.% fall in the prior month.