European Shares Slide As German Factory Orders Extend Decline

European stocks declined on Tuesday after Australia’s central bank surprised markets by lifting the official cash rate by a bigger-than-expected 50 bps, bringing back worries over rising prices back at the forefront.

Investors looked ahead to the monetary policy announcement by the European Central Bank (ECB) on Thursday, with the central bank expected to confirm an end to bond buying.

Underlining investor concerns about slowing economic growth, data showed earlier in the day that German factory orders fell for a third month in a row in April, driven by weakened demand and heightened uncertainty due to the Russian-Ukraine conflict.

Orders fell by 2.7 percent month-on-month in seasonally adjusted terms, after an upwardly revised decline of 4.2 percent in March.

Separate data published by the Sentix research group revealed that Eurozone’s investor sentiment fell less than expected in June.

The pan European Stoxx 600 was down half a percent at 441.79 after rising 0.9 percent on Monday.

The German DAX fell 0.9 percent and France’s CAC 40 index gave up 0.7 percent while the U.K.’s FTSE 100 was little changed, helped by the pound’s weakness.

The British pound fell to its lowest level in nearly three weeks after Prime Minister survived a “no-confidence” vote by 211 votes to 148 votes against his leadership.

SAS AB shares plummeted 12.2 percent. The Swedish government said it will not inject new capital into the loss-making airline and does not aim to be a long-term shareholder in the company.

Ted Baker shares plunged nearly 20 percent after the fashion chain said that its preferred bidder will not make a takeover offer.

National Express slumped 7 percent. The public transport company said that its revenue continues to track close to pre-pandemic 2019 levels.

In the short-term, the company expects the recovery in profitability to lag revenue recovery, and hence for margins initially to be below target 2022-2027 average.

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