European Shares Slide On Inflation, Rate Hike Worries

European stocks were moving lower on Friday after U.S. central bankers offered divergent signals over the size of the next interest-rate hike.

Inflation and recession worries were back in focus after data showed Germany’s producer price inflation accelerated unexpectedly to a new record high in July, primarily driven by higher energy costs.

Producer prices grew 37.2 percent year-over-year in July, well above the 32.7 percent surge in June, Destatits reported.

The upward trend in July was largely caused by a 105.0 percent jump in energy prices amid soaring natural gas and electricity costs.

Elsewhere, U.K. retail sales unexpectedly recovered in July while consumer sentiment hit a new record low in August amid the deepening cost of living crisis caused by rising inflation and the bleak economic prospects, separate data revealed.

Investors now look ahead to a Federal Reserve conference next week for indications of when and how much the U.S. central bank might raise rates.

The pan European Stoxx 600 dropped half a percent to 438.37 after gaining 0.4 percent on Thursday.

The German DAX fell nearly 1 percent and France’s CAC 40 index shed 0.7 percent while the U.K.’s FTSE 100 was little changed.

Swedish commercial vehicle manufacturer Volvo Group fell over 1 percent on news that Deputy CEO Jan Gurander will step down from his role as of December 31, 2022.

Danish mining equipment and cement maker FLSmidth surged 11.5 percent after raising its annual sales outlook.

French catering and food services group Sodexo fell almost 2 percent after Jefferies cut its rating on the stock.

Greatland Gold tumbled 3.2 percent. The mining company said it had retained 30 percent ownership of the Haverion project following Newcrest’s decision to not buy an additional 5 percent interest in the joint-venture at the agreed price of $60 million.

Kingspan Group surged 6.3 percent. The Irish building materials company delivered a record trading performance in the first six months of the year.

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