business

European Stocks Close Mixed as Global Markets Struggle for Direction

Roni Lehti | Reuters
  • European stocks advanced on Friday in an attempt to regain some ground with investors assessing the outlook for inflation and interest rates.
  • Market participants in Europe will be keeping a close eye on geopolitical developments in the region over the next few days, particularly after Finland announced Sunday that it will apply to join the military alliance NATO.

LONDON — European stocks were choppy on Monday as global markets struggled to find direction after last week's volatility.

The pan-European Stoxx 600 closed fractionally above the flatline, having clawed back losses of up to 0.8% earlier in the day. Basic resources jumped 1.6% to lead gains while tech stocks dropped 1.4%.

The uncertain trade on Monday came after a tumultuous week for global markets, although European stocks advanced on Friday in an attempt to regain some ground, with investors assessing the outlook for inflation and interest rates.

Beat Wittman, partner at Zurich-based Porta Advisors, told CNBC on Monday that China's zero-Covid policy, the war in Ukraine and the residual supply chain bottlenecks from the pandemic mean risk aversion in stock markets can be expected for some time to come.

"I don't think that we are done with volatility, and volatility is not particularly excessive at this stage, but we can clearly observe that risk appetite for financial assets has been significantly reduced," Wittman said.

He added that the actions of policymakers, from the Federal Reserve to governments in Europe, Moscow and China, will determine the speed at which bottlenecks and inflation ease, and capital markets return to some semblance of calm.

Markets around the world struggled as the new trading week kicked off.

U.S. stocks were mostly lower Monday ahead of a big earnings week for retailers. Shares in Asia-Pacific markets, meanwhile, closed mixed after China reported disappointing economic numbers as a result of Covid restrictions, adding fuel to fears of a slowdown in global growth.

Market participants in Europe will be keeping a close eye on geopolitical developments in the region over the next few days, particularly after Finland announced Sunday that it will apply to join the military alliance NATO. It will be a historic move for the Nordic country, which has had a decades-long policy of military neutrality until now.

Joining the military alliance will "maximize" Finland's security after Russia's unprecedented invasion of Ukraine in February, President Sauli Niinisto said Sunday. Russia warned last week that it would take "retaliatory steps" if Finland joins NATO, but Moscow did not specify what these could be.

Earnings came from Ryanair on Monday, the Irish airline posting a 355 million euro ($369.06 million) net loss for the pandemic-affected 12 months to the end of March. Ryanair said it was hoping for a return to "reasonable profitability" this year. Shares of the firm fell slightly by the close.

Shares of British advertising group S4 Capital fell 9.7% by mid-afternoon as it continued to take a hit following the delayed publication of its annual report.

Toward the top of the Stoxx 600, Italian water pump company Interpump Group climbed 5.1% after its first-quarter results.

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