European shares end ECB week lower as stimulus slows as anticipated

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On Friday, a basket of major European bourses had rounded off the session deeper into the reds, as the ECB (European Central Bank) had signalled a near-term tapering of its pandemic-associated bond repurchase program as anticipated, while regional Pan-European STOXX 600 shed 0.3 per cent after falling four of five sessions this week, tanked over 1.0 per cent in the week.

In point of fact, in the day’s steep losses in major European stock indices were almost entirely catalysed by investors’ frets that a tighter monetary policy could hinder economic growth further amid a rise in delta cases which had been threatening global recovery over recent months.

Nonetheless, latest ECB move to taper off its bond repurchase program came forth amid a robust build in price-pressures with core CPI (Consumer Prices Index) scaling higher to an ostensibly smothering readout. Surprisingly, although a dovish monetary policy stance would more likely to favour defensive stocks like of healthcare alongside real estate, both had reported their largest weekly percentage declines last week, as a raft of investors seemed to be positioning themselves for a sharp shoot-up in economic growth.

However, media toplines revealing a call between the US President Joe Biden alongside his Chinese counterpart Xi Jinping, had pared some of the losses and proffered an unprecedented cushion for the stocks heavily exposed to Asian trade, as Beijing had reportedly tightening up regulatory scrutiny on overseas-listed tech stocks, while European tech stocks ended 0.7 per cent higher and China-exposed mining stocks gaining as much as 1.1 per cent.

European bourses end lower at ECB week

Citing statistics, in the day’s European market wind-down, London’s FTSE 100 edged 0.07 per cent higher to 7,029.20 and French CAC 40 shed 0.31 per cent to 6,663.77, while Frankfurt’s DAX fell 0.09 per cent to 15,609.81.

Elsewhere in the Europe, Italy’s FTSE MIB ended 0.86 per cent lower to 25,686.47, while Madrid’s benchmark IBEX 35 lost as much as 1.20 per cent to wind down the session at 8,695.30. On the week, London’s blue-chip FTSE 100 shed 1.53 per cent, French CAC 40 curbed 0.39 per cent and Frankfurt’s DAX dwindled 1.09 per cent, while Italy’s FTSE MIB faltered 1.45 per cent and Madrid’s IBEX 35 muzzled 1.90 per cent.

Meanwhile, referring to the week’s ECB meet, UniCredit analysts wrote in a client note, “The outcome of the meeting is likely to be supportive in the short term”.