News ID: 318181
Published: 0357 GMT November 23, 2021

European markets retreat as investors monitor data

European markets retreat as investors monitor data

European stocks pulled back on Tuesday as markets monitored a COVID-19 surge, the prospect of U.S. rate hikes and the latest purchasing manager’s index (PMI) data for the euro zone.

The pan-European Stoxx 600 fell 0.9% by mid-afternoon, almost halving its earlier losses. Tech stocks dropped 2.5% while basic resources bucked the downward trend to add 0.8%, according to CNBC.

Euro zone business activity growth jumped unexpectedly in November, but a fresh wave of COVID-19 infections across the bloc and surging prices soured the outlook for December.

IHS Markit’s flash composite PMI, a useful gauge of economic health, climbed to 55.8 in November from 54.2 in October, greatly outstripping expectations in a Reuters poll of economists for a fall to 53.2.

However, optimism about the immediate future for economic activity ebbed, with the business expectations index falling to 66.6, its lowest reading since February, from 69.0 last month.

French and German PMIs both came in stronger than expected in November, while manufacturing supply bottlenecks continued to drag on factory production and drive-up inflationary pressures.

On Monday, Germany’s Health Minister Jens Spahn warned that “probably by the end of this winter, pretty much everyone in Germany will be vaccinated, recovered or dead ... That’s the reality,” he told a press conference.

Germany is considering whether to implement stricter COVID measures and perhaps a partial lockdown like its neighbor, the Netherlands. Germany has one of the lower vaccination rates in Western Europe.

Market participants are also digesting the announcement Monday that Federal Reserve Chair Jerome Powell was picked for a second four-year term to lead the central bank by President Joe Biden.

Shares in Asia-Pacific were mixed in Tuesday trade, with tech shares again leading declines following Powell’s nomination.

In terms of individual share price movement in Europe, British technical products company Diploma tumbled more than 8% as the market reacted with uncertainty to its earnings report on Monday.

German conglomerate Thyssenkrupp fell 6.1% after a report that Swedish activist fund Cevian will place a 6.9% stake in the company.

At the top of the European blue chip index, Swedish clothing retailer H&M climbed 4.8%.


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