Soaring inflation, rising pandemic cases drag European shares off record highs

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Soaring inflation, rising pandemic cases drag European shares off record highs

On Friday, a basket of European bourses had winded down the session in a downbeat tenure, widening their gaps further from a record peak, as concerns mounted over a rapid rise in pandemic cases, while a record high eurozone inflation last month had added to further holocaust on investors’ morale amid an ultra-dovish policy from ECB (European Central Bank).

Nevertheless, most major European bourses had recorded weekly percentage gains. Aside from that, as US December nonfarm payrolls data fell far short of estimation, market participants remained uncertain on how the latest US employment data would impact the US Fed’s monetary policy.

Before Friday’s December nonfarm payrolls miss, investors were banking on a rate-hike from US Fed as early as this month, however, a decline in growth momentum in US labor market had pushed rate-hike bets back to March, suggested analysts.

Nonetheless, in the day’s steep decline in European bourses were almost entirely catalysed by a record high eurozone inflation, as Eurostat data had unveiled later last week that CPI (Consumer Price Index), ECB’s core inflation indicator, in the bloc’s 19 member states sharing common currency euro, edged higher to 5.0 per cent over past twelve months through December, marking off a record high amid an energy price surge.

The regional pan-European STOXX 600 had rounded off the session 0.4 per cent lower, tumbling nearly 0.3 per cent in the week.

European shares fall amid growing inflationary pressure

Citing statistics, in the day’s European market wind-down, London’s blue-chip FTSE 100 added 0.47 per cent in context of a rise in rate-hike bets and French CAC 40 lost 0.42 per cent to 7,219.48, while Frankfurt’s Dow shed 0.65 per cent to 15,947.74.

Elsewhere in the Europe, Italy’s FTSE MIB edged 0.13 per cent lower to 27,618.47, while Madrid’s benchmark IBEX 35 dropped 0.43 per cent to 8,751.80. On the week, despite Friday’s declines, most major European bourses had eked out modest gains, as London’s FTSE 100 rose 1.36 per cent, French CAC 40 gained 0.93 per cent and Frankfurt’s DAX added 0.40 per cent, while Italy’s benchmark FTSE MIB soared 0.99 per cent and Madrid’s IBEX 35 surged 0.44 per cent.