European stocks expected to post weakest monthly return in a year, as dollar crashes against euro
September has been a tough month for equity investors everywhere, with Europe no exception as the region’s leading index faces its worst monthly performance in a year in a turbulent month for the markets.
The Stoxx Europe 600 SXXP index,
was down 0.1% to 454.55 on Thursday, with the index pegged at a decline of 3.2% for the month, which, if held up, would be the worst performance since October 2020. On a On a quarterly basis, the index is poised for a gain of 0.5%, which would be the weakest performance since the quarter ended in March 2020.
Elsewhere, the German DAX DAX,
down 0.5%, the French CAC 40 PX1,
fell 0.6% and the FTSE 100 UKX index,
was down 0.3%. The euro EURUSD,
meanwhile, was slightly below the dollar at $ 1.1588, but is trading at its lowest level in over a year as expectations of a tighter Federal Reserve policy left the dollar 1% higher. high this week.
Another day of soaring natural gas and electricity prices in Europe has been at the center of investor concerns.
October natural gas futures on the Dutch Title Transfer System (TTF) – the European benchmark – climbed almost 7% to 93.20 euros per megawatt hour (MWh), while UK natural gas futures rose 7% to 242.28 pence per therm. Forward electricity prices in Germany and France are also said to have reached record levels. The French government will meet on Thursday to determine how to ease high electricity prices for consumers.
Also on Thursday, the UK, which suffers from gasoline or gasoline shortages, saw three other small energy suppliers shut down, leaving more than 200,000 customers to find a new supplier as wholesale prices of natural gas have skyrocketed in the country.
Europe grapples with electricity and natural gas shortages as Friday marks the official start of winter. Utilities were under pressure on Thursday, with shares of Iberdrola IBE,
2.7% drop, National Grid NG,
down 1.5% and Vestas Wind Systems VWS,
fall of more than 3%.
Thursday winners included Diageo DEO,
up 1.2% after bullish trade update.
Actions related to mining such as BHP Group BHP,
and Rio Tinto RIO,
increased by 0.7% and 1.6%. Data from China showed economic activity in the manufacturing sector contracted in September, the first decline since early 2020.