European Stocks Close Sharply Lower On Inflation Worries

(RTTNews) - European stocks closed lower on Friday, extending recent weakness, as the mood remained bearish amid rising rising concerns about inflation and interest rate hikes.

A sell-off in the U.S. market after data from U.S. Labor Department showed consumer prices in the country shot up by more than expected in the month of May raised concerns about the outlook for interest rates.

Imposition of fresh lockdown measures in several parts of Shanghai due to a surge in coronavirus cases hurt as well.

The Labor Department said its consumer price index jumped by 1% in May after rising by 0.3% in April. Economists had expected consumer prices to increase by 0.7%.

The European Central Bank confirmed on Thursday that it will hike interest rates by 25 basis points at its July meeting. The bank also said that it expects a further hike in September.

The pan European Stoxx 600 drifted down 2.69%. The U.K.'s FTSE declined 2.12%, Germany's DAX shed 3.08% and France's CAC 40 slid 2.69%, while Switzerland's SMI ended 2.1% down.

The CAC 40 shed about 2.7% in the week and the FTSE 100 declined 3.8%, while the DAX and Stoxx 600 lost about 4.8% and 4%, respectively.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Ireland, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Turkey all ended sharply lower.

Russia ended modestly lower, while Iceland closed weak.

In the UK market, Anglo American Plc, Scottish Mortgage, CRH, Melrose Industries, Flutter Entertainment and Glencore lost 5.2 to 7.4%.

IHG, RS Group, ABRDN, Prudential, Aviva, Rolls-Royce Holdings, Coca-Cola HBC, Barclays, M&G, Rio Tinto and Antofagasta ended lower by 3 to 5%.

Aveva Group climbed 2.35%. Sainsbury (J), Endeavour Mining, Fresnillo and GSK gained 1.5 to 2%. Just Eat Takeaway climbed 5.7% after Bloomberg News reported that private equity firm Apollo is interested in acquiring its U.S. unit, GrubHub.

In the French market, Atos plunged more than 8%. Societe Generale, Credit Agricole, WorldLine, BNP Paribas, Saint Gobain, ArcelorMittal, Veolia, Faurecia, STMicroElectronics and Publicis Groupe lost 4 to 6%. Safran, Airbus Group, Renault, Michelin and AXA also declined sharply.

In Germany, Deutsche Bank, Siemens, HeidelbergCement, BASF, Covestro, Siemens Healthineers, Allianz, SAP, Vonovia, Linde, Infineon Technologies, Adidas, Daimler and Porsche Automobil shed 3 to 6%.

On the economic front, UK consumers' inflation expectations for the coming year rose again, according to the survey conducted by the market research firm Ipsos on behalf of the Bank of England showed.

The inflation rate for the coming year is seen at 4.6%, up from 4.3% in February.

The five-year ahead inflation expectations rose to 3.5 percent from 3.3 percent in the previous survey period.