2023-05-25 08:43:57
European stocks settled on Thursday after the worst two-day sell-off since March, as optimism about strong business results offset concerns about the repercussions of the US debt ceiling crisis and a global economic slowdown.
Data showed that the German economy contracted in the first quarter of 2023 by 0.3 percent compared to the last quarter of 2022 by 0.5 percent, which means that the main growth engine in Europe entered a state of recession.
“The reluctance of households to buy was evident in a variety of areas,” the German Statistical Office said.
“Families spent less on food, drinks, clothes and shoes, and on furniture,” he added.
The GfK Consumer Confidence in June also showed that German sentiment remained weak, with the index improving slightly to -24.2 in May, from -25.7 the previous month.
However, despite this negative data, the European Central Bank must raise borrowing costs further to bring inflation back to its target, the bank’s board member Bostjan Vasel said Thursday.
Vassell joins several other members of the European Central Bank’s 26-member Governing Council in calling for further increases that could continue beyond the summer months.
On the other hand, investors are concerned about the slow progress in negotiations on raising the US debt ceiling. Negotiators representing the Democratic President, Joe Biden, and the Republican Speaker of the House, Kevin McCarthy, held what the two sides described as fruitful talks on Wednesday, trying to reach an agreement to raise the debt ceiling. $31.4 trillion, avoiding a catastrophic default, but the negotiations ended without an agreement.
Fitch Ratings put the United States on watch for a possible downgrade on Wednesday, as the crisis remains unresolved.
price movements
The European Stoxx 600 index settled by 08:20 GMT, after losing about 2.5 percent in the past two days, due to a wave of selling shares of luxury product companies, and investors were affected by the crisis of raising the US debt ceiling.
Shares of European chipmakers rose on Thursday after NVIDIA Corp forecast quarterly revenue that beat Wall Street forecasts by nearly 50 percent.
Semiconductor shares jumped 8.06%, ASM International 8.57%, and the broader technology index rose 1.7%.
The German DAX fell by 0.32% after the German economic data.
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