European markets open to close, stocks, data, earnings

LONDON— European stocks are expected to slump at the open on Monday as investor sentiment is dominated by the prospect of forthcoming interest rate hikes.

The U.K.’s FTSE index is seen opening 42 points lower at 7,273, Germany’s DAX is expected to open 206 points lower at 13,547, France’s CAC 40 down 93 points at 6,085 and Italy’s FTSE MIB dow 370 points at 22,153, according to data from IG.

The slump in sentiment expected in Europe on Monday comes after the region’s major bourses closed in negative territory last Friday, with the investor mood darkened by the European Central Bank’s confirmation, last Thursday, that it intends to hike interest rates by 25 basis points at its July meeting.

A further hike is expected in September, the scale of which will be determined by the medium-term inflation outlook.

The central bank also raised its inflation expectations for the euro zone significantly and downgraded its growth forecasts.

On Friday, U.S. inflation data compounded the losses with the highly anticipated May consumer price index report coming in hotter than expected, with U.S. headline inflation hitting 8.6% year on year, outstripping economist expectations and the previous month’s figure.

Overnight, shares in Asia tumbled on Monday, as major markets in the region saw sharp losses and the dollar-yen hovered around the 135 level. Meanwhile, U.S. stock futures fell Sunday night as Wall Street tries to recover from one of its worst weeks of 2022.

There are no major earnings or data releases Monday.

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