Europe open: Shares down as inflation hits summer rate cut hopes
By Frank Prenesti
Date: Friday 24 May 2024
(Sharecast News) - European shares opened sharply lower on Friday as worries that persistent inflation could see a delay in planned interest rate cuts this year weighed on sentiment.
The pan-European Stoxx 600 index was down 0.8% to 517.38, with all major regional bourses following suit after large falls on Wall Street and in Asia.
In the US, Federal Reserve policymakers have this week expressed greater worries about inflation, with price rises stubbornly refusing to come down to the central bank's target of 2%.
Similar problems emerged in the UK this week where inflation fell less than expected, posing a major headache for embattled Prime Minister Rishi Sunak, who has called a General Election for July 4 with his part 21 points behind in the polls.
Further misery came in the form of UK retail sales, which fell a more-than-expected 2.3% last month against a consensus estimate of -0.4% due to an extremely wet spring. March's figure was also revised to a 0.2% decline from flat.
"Sales volumes fell across most sectors, with clothing retailers, sports equipment, games and toys stores, and furniture stores doing badly as poor weather reduced footfall," the Office for National Statistics said.
In equity news, Intertek gained as the company backed its full-year expectations and hailed a strong start to the year, with 7% growth in like-for-like revenue, driven by a recovery in the consumer products segment.
Acciona fell almost 6% after the Spanish construction and energy conglomerate on Thursday said its core earnings would grow less than previously expected this year based on current forecast energy prices.
Reporting by Frank Prenesti for Sharecast.com
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