“No one buys a new car when commodity prices are through the roof”said Michael Hewson, chief market analyst at CMC Markets.
The pan-European STOXX 600 index fell 3.6%. In the week it accumulated a loss of 7%, its worst decline since the liquidation generated by the coronavirus pandemic in March 2020.
The German DAX index, heavily weighted by the automotive sector, closed down 4.4%, to a low of more than a yearand auto firms plunged 5.6%, one of the worst results of the week among European sectors.
Among other regional indices, France’s CAC 40 fell 5%, Italy’s FTSE MIB sank 6.2% and Britain’s FTSE 100 fell 3.5%.
What happened this Friday was that Russian forces seized the largest nuclear power plant in Europe after the fire in a complex building in Ukraine.
For its part, Eurozone banks plunged 7.9% as government bond yields felland rising commodity prices triggered by Western sanctions against Russia raised concerns about runaway inflation and slowing economic growth.
Parallel, on Wall Street, the technological Nasdaq led the losses, with a drop of 1.6%. Big firms like Amazon, Apple, Alphabet and Microsoft all lost ground. Likewise, most of the 11 main sector indices of the S&P fell, with the financials in the lead.
The heavily market-watched Labor Department employment report showed jobs grew last month by 678,000, more than expected, and the unemployment rate fell to 3.8%, the lowest since February 2020.
“Three or four weeks ago, we would have thought this is an incredibly important number. But given the backdrop and the general events that are happening in Europe, it just isn’t,” said Zachary Hill, head of portfolio management. from Horizon Investments.
“The possibility of an escalation in the war, the possible impact on growth in Europe and in general, and the knock-on effects on commodities and inflation are taking up all the time and energy of investors,” Hill said.
Source: Ambito
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