Home ›› 06 Oct 2022 ›› Stock
European shares fell on Wednesday, snapping a three-day rally after data showed euro zone was unlikely to avoid a recession, with investor focus on US labour market report for clues on further rate hikes by the Federal Reserve.
The pan-European STOXX 600 index was down 0.95 per cent by 0824 GMT, after rallying more than 5 per cent in the previous three sessions.
The index had logged its best one-day performance since mid-March on Tuesday after weaker US manufacturing data, shrinking US job openings and a smaller-than-expected rate hike from the Reserve Bank of Australia spurred hopes that central banks globally could shift to less-aggressive rate hikes in future.
All eyes are on U.S private payrolls numbers for September due at 1215 GMT and the closely watched nonfarm jobs report expected on Friday for further evidence on that narrative.
"(Today) is a realisation that it's still too early to conclude the pivot is coming," said Azad Zangana, senior European economist and strategist at Schroders. Latest data showed euro zone business activity contracted for a third month in September, dashing any hopes the currency union avoids recession.
"In Europe, it's more of a question of where we are at now in the cycle. The ECB is raising rates quite aggressively and are expected to do so even if we enter a recession in the near-term because inflation is becoming more of an issue in Europe," Zangana added.
The STOXX 600 index has fallen 18.2 per cent so far this year as the region grapples with an energy crisis exacerbated by the Russia-Ukraine conflict and concerns about an economic downturn with aggressive policy moves by the US Fed and other central banks to quell inflation.
All the STOXX 600's sectoral indexes fell, with telecom, banks and automobiles down between 2 per cent and 2.9 per cent.
