European equity markets booked a weekly loss, with the German DAX down 0.3% on Friday and the benchmark Stoxx 600 falling 0.2% as investors continue to assess the global economic outlook while awaiting key monetary policy decisions from the Fed and the ECB next week. The ECB is expected to raise rates by 25 basis points, and markets will closely follow indications for future rate adjustments after data indicated the Eurozone economy slipped into recession. Across sectors, chemicals declined by 2% following a profit warning from Croda International while utilities closed higher.
The FTSE 100 declined by 0.5% on Friday, driven by an over 12% slump in Croda's shares following a profit warning. Additionally, energy shares lost more than 0.5% as the British government declared the continuation of the current Energy Profits Levy on oil giants until 2028, along with the establishment of a floor on the windfall tax. Furthermore, homebuilders faced pressure as HSBC temporarily withdrew all its mortgage deals for new borrowers due to high demand, and Nationwide announced rate increases on several of its products. Throughout the week, the UK index fell by 0.6%, marking its sixth week of losses in the last seven.
The CAC 40 index closed marginally down at 7,213 on Friday, amid a general cautious mood, as investors braced for monetary policy decisions by the US Federal Reserve and the European Central Bank next week. While a surge in US jobless claims has increased speculation that the Fed may opt to forgo a rate hike at the conclusion of its two-day meeting on Wednesday, the outcome is likely to be influenced by Tuesday's May inflation data. Meanwhile, the ECB is widely anticipated to raise rates by another 25 bps. On the corporate front, Eurofins Scientifique (-2.7%) was the top loser, along with Dassault Systemes (-2.5%), Vivendi (-2.4%) and Axa (-2%). Wordline (-1.9%), Danone (-1.9%) and BNP Paribas (-1.7%) also posted significant declines, while Teleperformance (+3.6%) outperformed. On the week, the CAC 40 lost about 0.8%.
The FTSE MIB index closed 0.4% down at 27,160 on Friday, pressured by losses for Milan’s heavy-weight banking sector as investors continued to assess the policy outlook for major central banks worldwide. The decline was led by a 10.8% plunge in shares of Banca Monte Paschi Siena after the BPER Banca’s CEO excluded the possibility of a merger between both lenders, which would have created a third banking powerhouse in Italy. Shares for the latter fell by 2%. In the meantime, Telecom Italia closed flat as KKR and the rival consortium formed by state-backed CDP and Macquarie are set to present their respective improved offers for the telecom's fixed-line assets in today's deadline. On the data front, Italian industrial production contracted more than expected in April. On the week, the FTSE MIB added 0.3%.
The IBEX 35 slid by 0.3% to 9,309 on Friday as caution reined ahead of next week's central banks meetings. Cellnex was crowned as the most bearish, falling by 1.93%. It was also a bad session for financials, with largest losses from CaixaBank (-1.34%) and BBVA (-1.15%). Additionally, Inditex reversed earlier gains to trade 0.36% lower despite sealing the deal with Jeanologia. On the positive side, the energy sector went up, led by Acciona Energia (2.22%) and Solaria (2.07%). Grifols also closed in the green (0.31%) following the news about new plasma centers in Canada. On the macroeconomic front, Spain's consumer morale jumped to an over 1-year high in May. Weekly the index closed flat.
