Europe open: Shares slide after hawkish comments from Fed, ECB

by | Apr 22, 2022

The increasing prospect of interest rate rises saw European shares slump at the open on Friday after more hawkish remarks from central bankers and a sharper-than-expected fall in UK retail sales last month.
Europe’s pan-regional Stoxx 600 1.15% in early deals with all major bourses in the red.

Global markets turned negative overnight after US Federal Reserve Chairman Jerome Powell said a 50-basis-point rate increase “will be on the table” when the bank meets on May 3-4.

Earlier on Thursday, European Central Bank vice president Luis de Guindos said he supported an end to bond purchases in July.

In the UK, retail sales fell by more than expected in March as surging inflation hit demand for food and petrol, according to official data released on Friday.

Retail sales volumes fell by 1.4% last month compared with February, the Office for National Statistics said, worse than expectations for a 0.3% monthly drop.

Sales of food and petrol, where prices have spiralled in recent months, fell sharply, the ONS said.

In equity news, shares in French group Kering fell 6% after releasing downbeat sales at its crown jewel Gucci, hurt by lockdowns in China.

SAP slipped 2.9% after flagging a revenue hit of €300m because of its exit from Russia.

B&M European Value Retail fell 5.2% as CEO Simon Arora, who bought the UK chain in 2004, announced he was retiring next year.

Shares in Swedish hygiene products group Essity soared by 12% despite the company taking a write-down of 1.4bn Swedish crowns on its Russia assets and posting a drop in first-quarter earnings.

HomeServe shares surged by 11% after announcing on Thursday it was in talks with Canada’s Brookfield Asset Management for a possible offer for the home repair services firm.

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