European stocks find support at end of volatile week

Published On : 05/13/2022

(Reuters) -European shares rose on Friday, as sentiment stabilised at the end of a volatile week dominated by worries about aggressive monetary policy tightening and slowing global growth.

The pan-European STOXX 600 index rose 1.3%, with banks and technology stocks leading early gains.

Global markets, particularly U.S. stocks, have gyrated wildly this week as investors feared that tightening financial conditions, with the Federal Reserve preparing for a series of interest rate hikes to contain a surge in inflation, will tip the economy into recession. [.N]

Fed Chair Jerome Powell repeated on Thursday his expectation that the Fed will raise interest rates by half a percentage point at each of its next two policy meetings, easing worries about a bigger 75 basis point rate hike that some investors were expecting.

Despite Friday’s gains so far, the STOXX 600 is set to post its fifth consecutive weekly decline.

The risks are to the downside with huge jump in economic uncertainty and large real disposable income shocks for households,” Deutsche Bank economists said in a note.

“Recession risk is rising. Ukraine war is the main concern in 2022. The main concern in 2023 is combined ECB/Fed tightening.”

Among individual stocks, Deutsche Telekom edged 0.7% higher, after it raised its annual earnings guidance.

Wind turbine maker Vestas dropped 4.4%, after Berenberg downgraded the stock to “hold.

French care home group Orpea, which faces criminal complaints over how it runs its centres and treats its elderly residents, dropped 4.7% after saying that it would not pay a dividend on 2021 earnings.

Norwegian Air edged up 0.5%, as the airline posted a quarterly loss and said the surge in fuel costs would partly offset the effects of increased summer bookings.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Subhranshu Sahu and Rashmi Aich)

Wanda Rich

Wanda Rich has been the Editor-in-Chief of Global Banking & Finance Review since 2011, playing a pivotal role in shaping the publication’s content and direction. Under her leadership, the magazine has expanded its global reach and established itself as a trusted source of information and analysis across various financial sectors. She is known for conducting exclusive interviews with industry leaders and oversees the Global Banking & Finance Awards, which recognize innovation and leadership in finance. In addition to Global Banking & Finance Review, Wanda also serves as editor for numerous other platforms, including Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.