European stocks slip on dour German sentiment survey ahead of Powell speech – Reuters

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, August 24, 2022. REUTERS/Staff

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  • STOXX stares at 1% loss on the week
  • British household energy prices to jump 80% from October
  • French consumer confidence unexpectedly rises in August
  • Dymon Asia to buy Salzgitter’s Singapore unit

Aug 26 (Reuters) – European shares slipped on Friday as investors fretted over downbeat German consumer sentiment data due to rising energy costs and the path for U.S. interest rate hikes ahead of Federal Reserve Chair Jerome Powell’s speech at Jackson Hole.

The pan-European STOXX 600 (.STOXX) dipped 0.1% in choppy trade, after rising at the open.

European Central Bank policymakers appeared increasingly concerned that high inflation is getting entrenched, minutes of the July 21 showed on Thursday, even as recession risks loomed. read more

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The STOXX was on pace to end the week down nearly 1% and log its second straight weekly decline.

German consumer sentiment is set to hit a record low for the third month in a row in September, a new survey showed, as households brace for surging energy bills. In contrast, French consumer confidence unexpectedly rose in August. read more

“German recession fears just became more intense with the sentiment index falling to a new record low… Germany is particularly reliant on external energy producers, and people are saving at the highest in 11 years, showing consumers are taking precautions in case of the worst case scenario,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

Elsewhere, regulator Ofgem said British energy bills will rise an eye-watering 80% to an average of 3,549 pounds ($4,188) a year from October, calling it a “crisis” that needed to be tackled by urgent government action. read more

“Because a large increase in bills has been expected, the news avoided shocking markets, but across Europe, which has a large exposure to discretionary retailers, there could be trouble on the horizon if the situation is prolonged and as consumers look to save instead of spend, which is already playing out in Germany,” added Yates.

Tech stocks (.SX8P) rose 0.5%, after Nvidia (.NVDA) and Amazon (AMZN.O) fuelled a rally on Wall Street ahead of Powell’s speech.

Miners (.SXPP) gained 0.9% as copper firmed on hopes that Chinese stimulus measures would boost demand.

Among other stocks, Danish brewery Carlsberg (CARLb.CO) slipped 0.6% after saying its Poland subsidiary could cut or halt beer production due to a lack of carbon dioxide deliveries. read more

Germany’s Salzgitter Maschinenbau Group (SZGG.DE) rose 0.7% after private equity firm Dymon Asia said it was buying the lifting equipment maker’s Singapore unit. read more

Shares of Britain’s Micro Focus (MCRO.L) nearly doubled after Canada’s OpenText (OTEX.TO) agreed to buy the enterprise software maker in an all-cash deal for $6 billion. read more

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Reporting by Anisha Sircar in Bengaluru: Editing by Sriraj Kalluvila

Our Standards: The Thomson Reuters Trust Principles.

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