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FILE PHOTO-An operator works at the Francfórt exchange
By Anisha Sircar and Ambar Warrick
Jan 7 (Archyde.com) – European stocks fell on Friday on concerns regarding rising inflation and rising coronavirus infections, while investors weren’t sure how weak U.S. payroll data would influence prices. Federal Reserve plans to tighten its monetary policy.
* The pan-European STOXX 600 Index was down 0.4% and lost 0.3% this week.
* The travel and leisure sector plunged 1.6% and was among the worst performers of the day as countries grapple with an omicron-led surge in COVID-19 cases.
* Data released on Friday also showed that euro zone inflation rose to an all-time high last month, likely pointing to increased pressure on the European Central Bank to raise interest rates this year.
* Aggressive signals from the Federal Reserve have also affected stock markets. But while the weak payroll data undermined the Fed’s lean somewhat, analysts believe rising wages might fuel inflation and push the central bank to tighten its monetary policy.
* “Inflation is the Fed’s main concern, and they are going to go ahead with rate hikes and possibly balance sheet liquidation,” said Chris Zaccarelli, chief investment officer at the Independent Advisor Alliance. “Today’s report is unlikely to change the Fed’s mind.”
* The prospect of higher interest rates boosted stocks in European banks, which closed the week with a jump of 6.7%.
* Profits at some chipmakers helped limit losses in the tech sector. Italy’s STMicroelectronics rose more than 3% following posting quarterly revenue above its own estimates.
* Meanwhile, Deutsche Bank rose 1.8% to a high in more than six months. The lender’s chief financial officer said in an interview that the firm is confident it will hit a key profitability target this year.
(Information from Anisha Sircar in Bangalore; Edited in Spanish by Javier Leira)