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By Peter Nurse
Investing.com – European stock markets fell Friday, continuing the previous session’s selloff in the wake of the ECB’s hawkish message, with weak U.K. retail sales data adding to the gloom.
At 04:00 ET (09:00 GMT), the DAX index in Germany traded 0.7% lower, the FTSE 100 in the U.K. dropped 0.5% and CAC 40 in France traded down 0.9%.
Sentiment has been hit by the hawkish message from European Central Bank President Christine Lagarde following the central bank tightening monetary policy by 50 basis points on Thursday.
Lagarde signaled further significant tightening remained ahead in the battle against inflation, saying “interest rates will still have to rise significantly at a steady pace to reach levels that are sufficiently restrictive to ensure a timely return of inflation to the 2% medium-term target.”
This monetary tightening is set to occur even as economic data points to the region teetering on the cusp of recession.
Both German and French economic activity data remained in contraction territory, while U.K. retail sales fell 0.4% on the month in November, a drop of 5.9% on the year, the third drop in four months, as promotions ahead of Black Friday failed to gain much traction with consumers hard-pressed by double-digit inflation.
Adding to the negative sentiment was a fresh wave of Russian missile attacks against Ukraine, hitting the capital Kyiv and escalating geopolitical tensions in the region.
In corporate news, TeamViewer (ETR:TMV) stock rose 3.1% after the German software development firm announced it had reached an agreement with Manchester United (NYSE:MANU) that will allow the high-profile football club to buy back the rights to its lucrative shirt sponsorship.
Games Workshop (LON:GAW) stock rose 13% after the Warhammer owner said it has signed an agreement in principle with Amazon (NASDAQ:AMZN) to develop film and television productions based on its figurine-based miniature wargame.
Crude oil prices weakened Friday, continuing the previous session’s losses on concerns surrounding future economic activity.
The ECB was joined by the Bank of England and the Swiss National Bank in hiking interest rates on Thursday, following the lead of the U.S. Federal Reserve, and pointed to more tightening to come. This, coupled with weak economic data, has increased fears of a potential global recession, and thus lower energy consumption.
By 04:00 ET, U.S. crude futures traded 1.5% lower at $74.94 a barrel, while the Brent contract fell 1.3% to $80.12.
Both benchmarks are on course to post weekly gains of around 5%, their biggest weekly gains since early October, helped by the closure of the Keystone pipeline following a leak and by likely resumption of full Chinese demand in 2023 as COVID curbs are lifted.
Gold futures fell 0.1% to $1,786.25/oz, while EUR/USD traded 0.3% higher at 1.0657.
Source: Investing.com