09.06.202217:10 Forex Analysis & Reviews: European stocks fall steadily

On Thursday's trading, the key European stock indices are declining amid the upcoming publication of the outcome of the European Central Bank's (ECB) meeting.

At the time of writing the article, the STOXX Europe 600 index of Europe's leading companies dropped by 0.56% to 437.89 points.

At the same time, the British FTSE 100 index sank by 0.51%, the French CAC 40 lost 0.2%, and the German DAX fell by 0.5%.

Top gainers and losers

Swedish helmet maker MIPS AB stock plunged by 6% as the company's management announced long-term goals for its key financial indicators.

Shares of Norwegian oil producer Var Energi ASA fell by 7.6%.

Market capitalization of Italian energy company Eni SpA dropped by 0.1%.

Shares in French luxury group Kering decreased by 1%.

Swiss financial conglomerate Credit Suisse stock went down 3.6%.

The capitalization of British American Tobacco PLC declined by 0.6%. Moreover, even the positive outlook for revenue and profit growth for 2022 could not change the situation.

Market pressure factors

Experts consider that the major reason for a permanent reduction in European stock markets on Thursday is investors' concerns about the prospects of the ECB monetary policy tightening. The publication of the regulator's monetary policy decision is scheduled for Thursday evening. The market expects the European regulator to announce its further steps to end asset purchases and increase the base rate to a non-zero level for the first time in eight years.

Upcoming tightening of the ECB monetary policy is associated with permanently accelerating inflation and the uncertain economic outlook.

Earlier, the EU Statistical office reported that last month consumer prices in the euro area soared by 8.1% year-on-year. At the same time, market analysts had predicted an increase of only 7.7%. Moreover, the figure in May hit an all-time record and exceeded the ECB target value of 2% more than four times.

Meanwhile, in the first quarter of 2022 the economy of 19 EU members grew by 0.6% compared to the previous quarter. Previously, experts reported an increase of only 0.3%.

At the end of the week, European stock exchanges are awaiting Friday's report from the US Department of Labor on the nation's consumer prices movements over the past month. This data will give an indication of the current state of the US economy. Moreover, the Labor Department report will traditionally be an important reference for the US Federal Reserve when deciding on further monetary policy tightening. The next meeting of the US regulator is due next week. The central bank is expected to increase its key rate by another 50 basis points. In addition, the US Federal Reserve will release its forecasts for the key indicators of the US economy in 2022 following a future meeting.

Previous trading results

As for yesterday's trading session, European stock market indexes also declined on Wednesday amid investors' concerns about further ECB moves.

Consequently, the STOXX Europe 600 index of Europe's leading companies fell by 0.57% to 440.37 points.

Shares of Melrose Industries, Aveva Group and Prosus NV were major gainers among the components of STOXX Europe 600. They added 11%,10.7%, and 8.3% respectively.

Stocks of low-cost carrier Wizz Air as well as logistics companies Moeller-Maersk and Kuehne & Nagel Group topped the list of top losers. They lost 9.5%, 8%, and 7.25% respectively.

The British FTSE 100 index was down 0.08%, French CAC 40 lost 0.8% and German DAX dropped by 0.76%.

Shares of French liquor producer and distributor Pernod Ricard SA decreased by 2.5%.

Spanish clothing retailer Industria de Diseno Textil SA stock soared by 6.4%. The company increased its net profit 1.8 times and revenue by 36% in the first fiscal quarter.

The market capitalization of Scandinavian air carrier SAS AB rose by 0.6%. The day before, the company's management reported that SAS AB had carried 1.826 million passengers the previous month. The number of clients fell by 18% in April.

On Wednesday, European investors analyzed the macroeconomic data in the EU. According to the data published the day before, the Construction Purchasing Manager's Index in the euro area fell to 49.2 points in May from 50.4 points in April. It reached the mark below 50 points for the first time in nine months marking the increase in business activity from the decrease. The index showed a record decline in May since February 2021.

Moreover, earlier the Organization for Economic Cooperation and Development worsened the outlook for EU economic growth in 2022 to 2.6% from the previously announced 4.3%. At the same time, the forecast of global economic growth in 2022 was lowered to 3% from the previously announced 4.5%. Global gross domestic product is expected to grow by 2.75% next year.