European shares end fourth week lower with tech, autos slammed – Reuters

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, January 25, 2022. REUTERS/Staff

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  • STOXX tracks worst month since October 2020
  • Retail stocks outperform
  • France sees robust growth in 2021; Germany contracts in Q4

Jan 28 (Reuters) – European shares fell on Friday, with the STOXX 600 index down for the fourth straight week as auto and technology stocks led declines amid the prospect of higher interest rates and concern over the situation in Russia and Ukraine.

The pan-European index (.STOXX) shed 1.0%, paring some losses after falling as much as 2% earlier in the day. The index lost 1.8% this week, marking its worst performance in over two months.

Euro zone bond yields rose following the hawkish message that emerged from the U.S. Federal Reserve policy meeting earlier this week.

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“There’s a whole lot to make investors nervous at the moment, and today seems to be the day European markets are really waking up to what the Fed’s increasingly hawkish stance will mean for all that cash sloshing around,” AJ Bell financial analyst Danni Hewson said.

Russia on Friday sent its strongest signal so far that it is willing to engage with U.S. security proposals and reiterated that it does not want war over Ukraine. read more

“As we’re approaching the weekend, a lot could happen in relation to the situation on the Ukrainian border and Russian troops,” David Madden, market analyst at Equiti Capital, said.

“The fear is that stock markets are closed for a 48-hour period, and what happens as tensions get ratcheted up in that timeframe is a huge deal.”

The top sectoral decliner, technology (.SX8P), fell 1.7%, tracking its worst month since 2008.

Adding to the gloom, euro zone economic sentiment deteriorated in January, pulled down by a more downbeat sentiment in the industry and services sectors.

Meanwhile, France posted its strongest growth in over five decades last year, hitting 7%, as the euro zone’s second-biggest economy bounced back from the COVID-19 crisis faster than expected, data showed. read more

However, the German economy, Europe’s largest, contracted more than expected in the fourth quarter of last year as pandemic-related restrictions hampered activity. read more

Auto stocks (.SXAP) skidded 1.8%, with shares in Volvo (VOLVb.ST) falling 3.5% after the Swedish truck maker reported lower fourth-quarter core earnings and proposed a smaller-than-expected dividend. read more

Luxury goods maker LVMH (LVMH.PA) rose 3.2% after saying quarterly sales growth accelerated, while Signify NV (LIGHT.AS), the world’s largest lighting maker, jumped 11.0% after reporting higher quarterly earnings. read more

Sweden’s H&M (HMb.ST) gained 5.1% after the fashion retailer posted a bigger profit rise than expected for the September-November period. read more

Home appliances maker Electrolux dropped 3.5% after saying global supply chain issues will linger and reported a drop in fourth-quarter profit. read more

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Reporting by Anisha Sircar, Susan Mathew and Shreyashi Sanyal in Bengaluru; Editing by Shinjini Ganguli, Shounak Dasgupta and Hugh Lawson

Our Standards: The Thomson Reuters Trust Principles.

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