On increased concerns worldwide recession may be caused by aggressive monetary tightening, European stock markets fell substantially down on Friday.
By 03:55 ET (07:55 GMT), the DAX in Germany was down 1.8 per cent, the CAC 40 in France was down 1.4 per cent, and the FTSE 100 in the United Kingdom was down 0.4 per cent.
The World Bank and the International Monetary Fund have warned of an imminent global economic slowdown. Indermit Gill, the chief economist of the World Bank, expressed concern about “generalized stagflation,” a period of weak growth and rising inflation.
This downturn was further demonstrated on Friday when UK retail sales showed their biggest decline thus far in August, falling 1.6 per cent month over month and 5.4 per cent annually.
The data contribute to the picture of an economy rapidly entering recession because they were much below economists’ projections for a loss of 0.5 per cent on the month and 4.2 per cent on the year.
In business-related news, Uniper’s (ETR: UN01) stock dropped 12 per cent after it was reported that Germany was on the verge of acquiring a majority stake in the struggling gas importer, opening the door for a potential full nationalization of the company.
On Friday, Germany placed Rosneft’s German unit under trusteeship and gave the federal regulator management of the PCK refinery in Schwedt.
After suffering significant losses the previous session, oil prices stabilized on Friday. However, they were still on track to lose money for a third consecutive week due to concerns that tightening monetary policy could negatively affect global growth and demand.