European Stocks Close Sharply Lower

European stocks closed sharply lower on Wednesday as investors pressed sales in several sectors amid concerns over inflation and higher interest rates, and on weak economic data from the region.

Central banks in New Zealand and Romania have hiked interest rates, and Poland’s central bank is widely expected to follow suit on Thursday.

The pan European Stoxx 600 declined 1.03%. The U.K.’s FTSE 100 ended down 1.15%, Germany’s DAX slid 1.46% and France’s CAC 40 shed 1.26%, while Switzerland’s SMI edged down 0.15%.

Among other markets in Europe, Austria, Belgium, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Portugal, Russia, Spain, Sweden and Turkey closed with sharp to moderate losses.

Poland and Czech Republic ended flat.

In the UK market, Antofagasta shed about 5.5%. Next, Whitbread, Melrose Industries, JD Sports Fashion, Imperial Brands, Informa, Taylor Wimpey, IAG, BT Group, Johnson Matthey, Smith & Nephew, Smith (DS) and B&M Eurpean Value Retail lost 3 to 4.8%.

Sainsbury (J), Royal Dutch Shell, Vodafone Group, Associate British Foods, Anglo American Plc and Evraz also declined sharply.

Tesco climbed nearly 6% after the supermarket chain raised its full-year outlook and launched a 500-million-pound share buyback program.

HSBC Holdings, Pearson, Fresnillo, Standard Chartered, Pershing Square Holdings and Polymetal International gained 1.3 to 3.5%.

In the French market, Technip, Unibail Rodamco, ArcelorMittal, Renault, Air France-KLM, Michelin, Publicis Groupe, Veolia, Sodexo and Faurecia lost 2 to 5%.

Thales shares shed about 1.7% as Google Cloud announced a strategic agreement with the French technology company to co-develop a sovereign hyperscale cloud offering for France.

Pernod Ricard gained about 1.5%, while Carrefour and Vivendi posted modest gains.

In Germany, Sartorius tumbled nearly 7%. Deutsche Telekom shed more than 5% after Goldman Sachs reportedly sold shares worth 1.58 billion euros ($1.83 billion) in a SoftBank structured finance deal.

BASF, Porsche Automobil, Covestro, Volkswagen, Fresenius, BMW, Linde, Deutsche Post and Daimler lost 2 to 4%.

Shares of German software developer TeamViewer plunged nearly 25% after the company cut its full-year guidance and reported weaker-than-expected quarterly results.

Ferrexpo, a Swiss iron ore company with assets in Ukraine, slumped more than 4%. The company reported that its third-quarter total iron ore pellet production increased 2 percent year-on-year to 2.6 million tons.

In economic news, the volume of Eurozone retail sales rose 0.3% sequentially in August, while in July it fell by a downwardly revised 2.6%, the European Union’s statistics agency Eurostat said. Economists had forecast a 0.8% rise for August.

German factory orders fell 7.7% on a monthly basis in August, reversing a revised 4.9% rise in July as supply bottlenecks affected makers of cars and carparts in particular, data from Destatis revealed earlier in the day. Orders were forecast to drop moderately by 2.1%.

Germany’s construction sector continued to contract in September with supply bottlenecks, capacity constraints and strong price pressures acting as headwinds to activity and new orders, survey data from IHS Markit showed on Wednesday.

The construction Purchasing Managers’ Index rose to 47.1 in September from 44.6 in August. However, a reading below 50.0 indicates expansion.

The UK construction sector growth weakened in September with the output rising to the smallest extent for eight months amid supply chain issues and softer demand, data published by IHS Markit showed on Wednesday.

The Chartered Institute of Procurement & Supply construction Purchasing Managers’ Index fell more-than-expected to 52.6 in September from 55.2 in August. The expected level was 54.0.

The index signaled the weakest speed of recovery for eight months. Nonetheless, a reading above 50.0 indicates expansion.