European stocks retreated on Wednesday as global sentiment remained volatile, with investors monitoring the economic outlook.
The pan-European Stoxx 600 dropped 0.6% in early trade, with autos shedding 2% to lead losses as almost all sectors and major bourses slid into the red. Oil and gas stocks bucked the downward trend to add 0.8%.
The modest losses for European markets followed the trend seen elsewhere overnight. In Asia-Pacific markets, Hong Kong shares led losses on Wednesday, with stocks there taking the negative lead from Wall Street.
U.S. stock futures were slightly lower early on Wednesday after an attempted rally for risk assets fizzled out on Tuesday. Sentiment was dampened in part by a disappointing consumer confidence reading, which came in at 98.7, below Dow Jones’ consensus estimates of 100.
Asia-Pacific markets had been buoyed Tuesday after China’s decision to halve the Covid quarantine period to seven days, with a further three days spent at home, which gave markets a signal that Beijing is relaxing its strict approach to eradicating Covid-19.
In other news, investors continue to watch for news out of the NATO summit in Spain on Wednesday as well as the European Central Bank’s forum in Sintra, Portugal. Federal Reserve Chairman Jerome Powell and ECB President Christine Lagarde are both due to speak on Wednesday afternoon.
There was momentous news from the NATO summit in Madrid on Tuesday as NATO Secretary-General Jens Stoltenberg announced that a deal had been reached to admit Sweden and Finland after objections from NATO member Turkey had been resolved.
Spanish inflation surpassed 10% in June for the first time since 1985, preliminary data showed on Wednesday. Annual inflation rose to 10.2%, up from 8.7% in May and above a 9% forecast from analysts polled by Reuters.
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