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FILE PHOTO: The German DAX index in Frankfurt
For Sruthi Shankar, Susan Mathew and Bansari Mayur Kamdar
March 7 (Archyde.com) – European stocks finished off session lows on Monday, helped by a 4.3% rally in energy stocks after oil topped $130 a barrel, but fears of Inflation due to the conflict between Russia and Ukraine caused German and Italian stocks to confirm a bear market.
* London’s FTSE 100, heavily weighted by commodities, lost the least, down 0.4%. Oil majors BP Plc and Shell jumped 3.8% and 8%, respectively, as the United States and Western allies considered whether to ban Russian oil imports over Ukraine’s invasion.
* Europe’s biggest economy, Germany, has no plans for now to stop importing Russian oil, gas and coal but is keeping the option open, Economy Minister Christian Lindner said on Monday.
* “Germany is one of the European economies that is going to take a big hit if the allies and the US impose sanctions on Russian oil,” said Ipek Ozkardeskaya, senior analyst at Swissquote.
* “We are already at sky-high inflation… We could see a situation where we have high inflation and high unemployment and weak global growth. Stagflation is unfortunately a very likely scenario.”
* The pan-European STOXX 600 index trimmed losses of nearly 3% to close down 1.1% but at its lowest level in a year. Banks and automakers led the declines.
* The German DAX and Italian MIB are down more than 20% from their closing record highs on Jan 5, confirming bear market levels. Indices fell 2.0% and 1.4% respectively on the day
* “We expected European stocks to outperform US stocks (this year). But now, with war looming in Germany, that’s not going to be the case anymore.”
* The eurozone banking index fell 4.1% to a 13-month low ahead of this week’s European Central Bank meeting, with mixed views on how the central bank will respond to the potential economic impact of the Ukraine conflict.
(Reporting by Sruthi Shankar in Bengaluru; Editing in Spanish by Javier López de Lérida)