FX.co ★ European stocks open lower

On Monday, key European stocks are significantly declining. At the same time, shares of automotive, chemical, and technological sectors are top losers. Market makers are anxiously awaiting the annual economic symposium in Jackson Hole scheduled for Thursday.

At the time of writing, the STOXX Europe 600 index of Europe's leading companies lost 1.1% and fell to 432.52 points. Shares of German generation company Uniper SE, Swedish oil and gas company Orron Energy AB and Swiss online pharmacy Zur Rose Group AG topped the list of losers among the STOXX Europe 600. They went down 10%, 8.6%, and 8.4% respectively.

Meanwhile, the French CAC 40 dropped by 1.65%, the German DAX fell by 1.79%, and the British FTSE 100 lost 0.57%.

Top gainers and losers

The shares of Swiss bank Credit Suisse fell by 1.2%. The day before, the company announced the appointments of Dixit Joshi from Deutsche Bank as its new Chief Financial Officer and former Bank of Ireland chief executive Francesca McDonagh as Group Chief Operating Officer.

The shares of UK cinema chain operator Cineworld Group Plc soared by 8.4%. The day before, the company confirmed the news that it was considering bankruptcy in the US as part of the restructuring process. Notably, Cineworld Group Plc's stocks fell by 58% in trading last Friday.

The market capitalization of the German healthcare company Fresenius SE & Co. rose by 6.1%. On Monday, the company's management announced the resignation of Chief Executive Officer Stefan Sturm. Michael Sen will become the new chief executive of Fresenius SE & Co. Currently, he heads the Fresenius Kabi division.

Market sentiment

On Monday, European investors were focused on new signals from the US Federal Reserve.

Last week, some of the participants in the US regulator's meeting argued in favor of lowering the pace of prime rate hikes as part of monetary policy tightening. At the same time, many other policymakers said it would be better to keep the rate permanently high to bring inflation down to the 2% target.

According to US Fed Chair Jerome Powell, the interest rate is currently at a neutral level. However, some participants of the meeting disagree with him and believe that the rate is still below neutral.

This dilemma will probably be finally resolved next Thursday. The annual economic symposium in Jackson Hole is scheduled on this day. It will determine how significantly the Federal Reserve can tighten its monetary policy.

As for the eurozone's domestic statistics, preliminary data on business activity in the EU countries in August will be published on Tuesday. According to the forecasts of market experts, the composite PMI in manufacturing and service sectors of 19 EU countries fell to 49 points in August from 49.9 points in July. In this regard, investors fear a recession in the European economy, the onset of which may accelerate the energy crisis.

Moreover, stock markets in other countries show pessimistic sentiment and try to avoid risks. On Monday, Asian stock exchanges were also trading mostly in the red zone, while futures on US indices were down 1-1.5%. Moreover, on Monday the euro slipped below $1 for the first time since July.

Previous trading results

Last Friday, European stock indices mostly declined amid investors' worries about the state of the global economy. Market makers were analyzing the prospects of further interest rates increase and its impact on European and global economic growth.

Consequently, the STOXX Europe 600 index of Europe's leading companies fell by 0.77% to 437.36 points. Shares of Swiss pharmaceutical company Siegfried Holding AG and Dutch operator of the payment system Adyen N.V. were top losers among the STOXX Europe 600. They lost 8.4% and 7% respectively.

Meanwhile, the French CAC 40 decreased by 0.94%, the German DAX dropped by 1.12%, and only the British FTSE 100 gained 0.11%.

On the whole, last week European stocks closed mostly in the red zone: the CAC 40 and the DAX lost 0.9% and 1.8% respectively, while the FTSE 100 gained 0.7%.

The shares of Dutch food delivery service Just Eat Takeaway.com NV soared by 26% on Friday. Earlier, the news came that the company would sell a 33% stake in Latin American joint venture iFood for 1.8 billion euros to Dutch conglomerate Prosus NV.

Shares of Spanish banks Banco Sabadell and Santander sank by more than 3% and Italian Mediobanca and UniCredit stocks dropped by 3.8%.

The shares of British clothing company Joules Group PLC plummeted by 36%. The day before, the company reported a significant drop in trading since the latest update. Against this backdrop, Joules Group PLC's management expects its losses for 2022 to be significantly below market expectations.

The stocks of Irish construction materials maker Kingspan Group rose by 6.6%. Earlier, the company said it was able to survive a sharp rise in production costs, which only slightly affected its margins.

The news came on Friday that retail prices of German manufacturers (PPI) jumped by 5.3% month-on-month and by 37.2% year-on-year in July. This one-time increase was the biggest since Germany began collecting data in 1949. Moreover, analysts predicted a continued annual slowdown in producer price growth to 32%.

According to the UK's Office for National Statistics, retail sales in the state unexpectedly increased by 0.3% in July. At the same time, the figure still shows an annual decline of 3.4% amid the struggle of local consumers with rising prices. Besides, analysts had predicted declines of 0.2% and 3.3% respectively.

The GfK consumer sentiment index in the UK plunged to minus 44 in August from July's reading minus 41, which was the lowest mark since the beginning of the survey.

Meanwhile, economic growth in the EU countries in April-June was recently revised downward from 0.7% to 0.6% on a quarterly basis.