European stocks sink fast as Wall Street falters

Traders work on the floor of the New York Stock Exchange February 1, 2019. — Reuters pic

LONDON, Feb 7 — Losses in eurozone stock markets accelerated today as a pessimistic economic growth outlook dampened sentiment and US markets opened firmly in the red.

“Yet more bad news reinforces the impression that the eurozone is headed steadily into recession territory,” noted IG analyst Chris Beauchamp.

The EU Commission, the bloc’s executive arm, said it now expects growth of 1.3 per cent in the eurozone this year, a significant cut from the 1.9 per cent it predicted only last November.

It said Europe is facing international headwinds — including Brexit fears, Italian economic woes and the global trade war — which have now taken the steam out of a post-crisis recovery in the eurozone.

“That eurozone growth downgrade (is) not helping matters, but after their recent surge markets seem quite vulnerable to an outbreak of bad news,” Beauchamp told AFP.

Sterling wobbles

London stocks, although also lower, outperformed their peers after the Bank of England left interest rates unchanged and warned of Brexit uncertainties.

The pound wobbled during the central bank’s update, but quickly recovered.

“The event got off to quite a shaky start as the central bank released its latest forecasts showing GDP growth this year suffered its biggest downward revision since August 2016,” said Craig Erlam, senior market analyst at Oanda.

“Despite that rocky start, the pound gradually recovered throughout the press conference to trade flat on the day against the dollar, having been down by more than half a per cent at one point,” he said.

Britain and the EU, meanwhile, agreed Thursday to hold more talks to try to avoid a no-deal Brexit, after a “robust” meeting between Prime Minister Theresa May and European Commission chief Jean-Claude

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