Energy supply crunch, COVID woes weigh on European stocks

The German share value index DAX graph is pictured on the inventory change in Frankfurt, Germany, July 7, 2022. REUTERS/Workers

July 11 (Reuters) – European shares fell on Monday, dragged decrease by economy-sensitive shares, as issues over an power provide crunch and recent COVID-19 instances in China harm danger urge for food and heightened worries a few recession.

Nord Stream I, the most important single pipeline carrying Russian fuel to Germany, started annual upkeep on Monday, with flows anticipated to cease for 10 days, however governments, markets and firms are frightened the shutdown may be prolonged due to the conflict in Ukraine. learn extra

The pan-European STOXX 600 index (.STOXX) broke a three-day profitable streak to finish 0.5% decrease, after posting its greatest week in seven on Friday.

China-exposed vehicles (.SXAP) fell 2.8%, probably the most among the many European sectors, and dragging the German DAX (.GDAXI) down by 1.4%.

Miners (.SXPP) slid 1.9% as metallic and iron ore costs slumped on worries that rising COVID-19 instances in Shanghai would result in extra curbs. learn extra

Buyers are frightened concerning the results on industries throughout the board, Susannah Streeter, senior funding and markets analyst at Hargreaves Lansdown stated, including that if emergency plans carried out by the federal government embrace rationing, then they might actually harm development inside economies extremely reliant on exports from Russia.

A whole halt of Nord Stream I’d preserve European fuel costs greater for longer, piling strain on the European Central Financial institution, which is ready to extend its key rate of interest later this month for the primary time in additional than a decade.

Uniper (UN01.DE), among the many first to flag successful from falling Russian provides, dropped 14.4% as a dispute between Germany and Finland over the price of rescuing the fuel importer flared. learn extra

Markets have had a tricky couple of weeks on recession worries, and the euro approaching parity with the greenback provides to investor worries concerning the hit to earnings.

Euro zone finance ministers stated on Monday the struggle towards inflation was the present precedence regardless of dwindling development within the bloc, as they’re set to learn of a deteriorating financial outlook by the European Fee. learn extra

Investor await U.S. June inflation knowledge due on Wednesday for additional clues on the U.S. rate of interest path later this 12 months, adopted by an upcoming second-quarter reporting season for indicators on how company are faring amidst greater inflation and tightening monetary circumstances.

A gauge of eurozone lenders (.SX7E) dipped 2.3% monitoring a pointy fall in euro zone bond yields. learn extra

Defensive sectors rose, with utilities (.SX6P) up 1.3%.

Sinch (SINCH.ST) tumbled 27.5% as quick vendor Ningi Analysis shorted the Swedish cloud communications firm.

Dufry (DUFN.S) gained 3.8% after the duty-free retailer agreed to purchase Italian airport and motorway caterer Autogrill (AGL.MI). learn extra

Reporting by Susan Mathew and Devik Jain in Bengaluru; Modifying by Sherry Jacob-Phillips and Bernadette Baum

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