European Stocks Close Notably Lower On Growth Worries

European stocks closed notably lower on Monday as worries about slowing growth, soaring inflation and geopolitical tensions amid the ongoing war in Ukraine weighed on sentiment.

The mood was cautious with investors looking ahead to the monetary policy meetings of the Federal Reserve and the European Central Bank, taking place this week.

The pan European Stoxx 600 tumbled 1.46%. Germany’s DAX ended 1.13% down and France’s CAC 40 shed 1.66%, while Switzerland’s SMI slid 1.29%. The U.K. market remained closed for a holiday.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Iceland, Netherlands, Norway, Poland, Portugal, Spain and Sweden ended weak, losing between 1 to 2.5%.

In the French market, ArcelorMittal, Safran, Schneider Electric, Hermes International and Veolia ended lower by 3 to 4%.

Valeo, Accor, Dassault Systemes, Teleperformance, STMicroElectronics, Societe Generale, L’Oreal, Cap Gemini, Publicis Group, Faurecia, Bouygues and Kering lost 2 to 3%.

Atos rallied about 2.3% and Carrefour gained nearly 1%.

In Germany, Continental, Daimler, BASF and Vonovia lost 5 to 6%. Bayer declined more than 4%, while Infineon Technologies, Porsche Automobil and MTU Aero Engines lost 3 to 3.3%, while Zalando, Merck, RWE and Siemens ended lower by 2 to 2.7%.

Deutsche Bank, Deutsche Post, Sartorius, Henkel and Siemens Healthineers also ended sharply lower, while Hello Fresch climbed nearly 2.5%.

On the economic front, Eurozone manufacturing activity grew at the slowest pace in more than a year in April amid sustained supply-side pressures and disruptions to demand and production due to the ongoing war in Ukraine, survey data from S&P Global showed.

The final manufacturing Purchasing Managers’ Index fell to a 15-month low of 55.5 in April from 56.5 in the previous month. However, this was above the flash reading of 55.3.

Eurozone economic confidence unexpectedly weakened in April driven by worsening sentiment in industry, retail trade, construction and among consumers, survey results from the European Commission showed.

The economic confidence index dropped to 105.0 in April from 106.7 in March, while the reading was forecast to improve to 108.0.

Among big-four economies, economic sentiment deteriorated in Spain and in France. At the same time, confidence remained broadly unchanged in Germany, while it improved in Italy.

The industrial sentiment index came in at 7.9 in April, down from 9.0 in the previous month. Economists had forecast the index to advance to 9.5.

The consumer sentiment index fell to -22.0 from -21.6 a month ago. The flash score was -16.9. The fall reflected marked decreases in households’ assessments of their own past financial situation and their intentions to make major purchases.

Germany retail sales unexpectedly dropped in March, data from Destatis showed. Retail turnover was down by real 0.1% on a monthly basis in March, offsetting a 0.1% rise in the previous month and in contrast to the expected growth of 0.3%.

On a yearly basis, retail sales fell 2.7%, confounding expectations for an increase of 6.1%.

Survey data from the State Secretariat for Economic Affairs, or SECO, showed Swiss consumer sentiment deteriorated sharply in the first quarter as households turned far more pessimistic about future general economic situation.

The consumer sentiment index fell to -27.4 in the second quarter from -3.8 in the first quarter. The index logged its biggest decline since the onset of the pandemic in the spring of 2020.