European stocks lost their momentum, with all of the region’s major indices falling around 1% at the close of Thursday trading amid renewed recession jitters in the US and a hawkish European Central Bank.
The Stoxx Europe 600 lost 1.6%, London’s FTSE 100 fell 1.1%, the Swiss Market Index was down 1%, France’s CAC 40 plunged 2% and Germany’s DAX dropped 1.7%.
The latest data from the world’s largest economy showed a marked slowdown in retail sales and manufacturing output in the US for the last month of 2022, prompting analysts to affirm forecasts for a mild recession in 2023.
Adding to jitters is the December 2022 minutes of the ECB that said policymakers are ready to make “clear that interest rates would still have to rise significantly at a steady pace,” with another 50-bp rate hike likely in February.
In corporate news, Lufthansa shares ended 1% higher on Xetra in Frankfurt amid rumors that it is planning to sell a stake in its aircraft maintenance subsidiary for up to 1.5 billion euros. Meanwhile, Geberit ended 1.4% in the red after the Swiss sanitary products manufacturing giant reported a 2% decline in FY22 sales.