European stocks headed for their worst week since January on growing concerns

European stocks headed for their worst week since January on growing concerns/ANI

MINT | June 14, 2024 | 11:18 PM IST | Breaking News | Follow on Google News

European stocks headed for their worst week since January on growing concerns

European stocks headed for their worst week since January on growing concerns

Market Close Highlights : European stocks headed for their worst week since January on growing concerns about political turmoil in France.

The Stoxx 600 held at Thursday’s low as France’s CAC 40 index dropped 1%. The euro fell to its lowest against the dollar since April.

S&P 500 futures, meanwhile, held steady after notching up four record highs for the week. A gauge of the dollar rose against major global currencies, while Treasury yields were little changed after falling in the previous session.

European markets are increasingly anxious after French President Emmanuel Macron announced a snap legislative election following his party’s drubbing in the European Parliament elections. Investors fear a win for Marine Le Pen’s far-right National Rally party, which leads polls by a wide margin, will usher in looser fiscal policies.

The uncertainty has sent the premium France pays on its debt relative to Germany soaring this week, on pace for the biggest move stretching back to the European debt crisis in 2011.

“It’s hard to ignore the parallels between our current situation and the time of the sovereign debt crisis, as there’s that familiar focus on election results, sovereign bond spreads and debt sustainability,” said Jim Reid, an analyst at Deutsche Bank AG. That’s “coupled with no obvious sign about where things are headed next.”

In Asia, MSCI’s Asia Pacific index slipped as losses in Australian and Chinese stocks offset gains in Japan’s benchmark.

The Bank of Japan triggered a slump in the yen after making investors wait until its July meeting for details on its paring of bond buying, a move that was also seen as a delay in the normalization in policy. Still, Governor Kazuo Ueda said he sees the possibility of a rate hike in July, depending on data.

A “weak yen might weight down the flows from overseas investors in the summer,” said Hiromi Ishihara, head of equity investment at Amundi Japan. “That said, we still believe that BOJ is set to move a further hike this year.”

MINT