LONDON – European stocks were volatile on Monday as global markets struggled to gain momentum and recover from last week’s volatility.
The pan-European Stoxx 600 spun just below the ground until late in the morning, recovering losses of up to 0.8% at the start of trading. Core resources jumped 1.3%, while technology stocks fell 1.4%.
Uncertain trading comes after a tumultuous week for world markets, although European stocks rose on Friday in an attempt to regain some positions, with investors assessing the outlook for inflation and interest rates.
Beat Wittman, a partner at the Zurich-based Porta Advisors, told CNBC on Monday that China’s zero-Covid policy, the war in Ukraine and the remaining bottlenecks in the pandemic supply chain mean that deviation from stock market risk could be waiting for a while.
I do not think we are done with volatility and volatility is not particularly excessive at this stage, but we can clearly see that the risk appetite for financial assets is significantly reduced.
Whitman won
Partner, Porta Advisors
“I do not think we are done with volatility and instability is not particularly excessive at this stage, but we can clearly see that the risk appetite for financial assets is significantly reduced,” Whitman said.
He added that the actions of politicians, from the Federal Reserve to the governments of Europe, Moscow and China, will determine the speed with which bottlenecks and inflation ease and capital markets return to a semblance of calm.
Overnight, other global markets struggled to build positive sentiment as the new trading week began. US stock futures fell ahead of pre-market trading on Monday ahead of big weekly gains for retailers.
Shares in the Asia-Pacific market gave up early gains on Monday after China announced disappointing economic figures as a result of Covid’s restrictions, adding fuel to fears of a slowdown in global growth.
Market participants in Europe will closely monitor geopolitical developments in the region over the next few days, especially after Finland announced on Sunday that it would apply to join NATO. This will be a historic move for the Scandinavian country, which has so far pursued a decade-long policy of military neutrality.
Joining the military alliance will “maximize” Finland’s security following Russia’s unprecedented invasion of Ukraine in February, President Sauli Niinisto said on Sunday. Russia warned last week that it would take “retaliatory steps” if Finland joined NATO, but Moscow did not specify what they could be.
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The profit came from Ryanair on Monday, with the Irish airline reporting a net loss of 355 million euros ($ 369.06 million) for the 12-month pandemic affected by the end of March. Ryanair said it hopes to return to “reasonable profitability” this year.
Shares of the British advertising group S4 Capital fell more than 6% until late in the morning, as it continues to suffer blows after the delayed publication of its annual report.
At the top of the Stoxx 600, Italian water pump company Interpump Group rose more than 7% after its first quarter results.
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