European shares fell on Friday, with Germany leading the losses, as negative indicators regarding consumer sentiment in the continent’s largest economy worried investors, while US Federal Reserve Chairman Jerome Powell’s tightening tendency raised concerns.
The pan-European Stoxx 600 index fell 1.7%, and closed down 2.6% during the week. The German DAX index fell at the close by 2.3%, with a weekly decline of 4.2%; Which makes it his worst weekly performance in over two months.
A new survey showed that German consumer sentiment is expected to fall to an unprecedented level for the third consecutive month in September as households prepare for higher energy costs. By contrast, French consumer sentiment rose unexpectedly in August.
Powell’s comments did not lead to any easing of tension in stock markets, following he indicated that the US economy will need tight monetary policy “for some time” before inflation is under control, which means slower growth, a weaker labor market and “some pain” for families and companies. Noting that there is no quick remedy for the high prices.
The retail and travel and leisure sectors each fell regarding 3.5% in the largest decline among European sectors.
