European stock markets shrug off France's stalling economy
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Loading... - Vittoria Riva
- 29 Apr 2022
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European stock markets continued their upward climb on Friday as investors turned their attention to a string of corporate results, shrugging off a stalling French economy.
In London, the FTSE 100 (^FTSE) rose 0.5% after opening, while the French CAC (^FCHI) climbed 0.7% and the DAX (^GDAXI) was 0.9% higher in Frankfurt.
It came as the French economy unexpectedly ground to a halt in the first quarter of the year, with no change in GDP during the period. This marked a sharp slowdown from the 0.8% growth recorded at the end of 2021.
“For the coming quarters, the growth outlook is not very bright. The sharp rise in inflation, which is now spreading more and more widely throughout the economy, is weighing on household incomes,” Charlotte de Montpellier of ING, said.
“The situation in China should weigh on production lines, complicating the supply of inputs and disrupting production in the coming months, but also on French exports.
“French economic growth is therefore likely to remain weak. Although none of these factors is sufficient to tip the French economy completely into recession, the combination of all of them at the same time drastically increases the risk of one or two quarters of negative growth for the rest of the year.”
Elsewhere, Germany has reportedly dropped its opposition to sanctions on Russian oil.
Europe's largest economy has so far attempted to block a ban on the Kremlin's energy, warning such a move would spark recession across the continent. However, vice chancellor Robert Habeck has now said that Germany "won't stand in the way" of new sanctions.
Across the pond, S&P 500 futures (ES=F) were down 0.5%, Dow futures (YM=F) shed 0.1%, and Nasdaq futures (NQ=F) were 0.8% lower as trade began in Europe.
On Thursday, America’s economy shrank unexpectedly in the first quarter of the year, contracting by 0.4% in the first quarter, or 1.4% on an annualised basis. This was the weakest quarter since the start of the pandemic in 2020. Read More...
