European stocks started the day down, which was the same as what happened in Asia. A worsening oil crisis in the region and a steady rise in bond rates around the world fueled fears of a recession.
At 07:07 GMT, the pan-continental STOXX 600 index was down 0.8%, extending down for a sixth consecutive day, while Germany’s DAX index fell 0.9%, drawing lessons from Wall Street, which plunged further into a bear market overnight. [.N]
Related: European Stock Futures Edge Higher; Overall Sentiment Remains Weak
All of the sector indices went down, but the oil and gas, banking, and basic resources sectors, which are important to the economy, went down by between 1 and 1.5 percent.
As benchmark 10-year U.S. Treasury yields surpassed 4%, their highest level in 12 years, investors feared that the Federal Reserve may have to raise interest rates over 4.50% in its fight against inflation. This weighed on tech companies.
The FTSE 100 index dropped 0.9% after Moody’s (NYSE:MCO) said that unfunded UK tax cuts would be “bad” for the country’s credit rating. This made gilts sell-offs worse.
In the meantime, geopolitical tensions rose as Europe looked into what Germany, Denmark, and Sweden said were attacks on two Nord Stream pipelines at the centre of an energy standoff.
In light of the bad news, a study done on Wednesday predicted that the mood of German consumers will hit a record low in October, as inflation rates continue to rise and energy costs keep going up.
Commerzbank (ETR:CBKG) dropped 2.1% after saying that its operating profit for the third quarter will be cut by 490 million euros ($469 million) because of extra provisions for Swiss franc loans taken out by its Polish mBank subsidiary.
Related: European Stock Futures Mixed; U.K. Set to Deliver “Mini Budget”
MediaForEurope (MFE) dropped 2.2% after Italy’s biggest commercial broadcaster said that its first-half operating profit dropped by 44%. This was because ad sales were flat and energy costs went up.
