FTSE 100 and European stocks down amid recession fears

Microsoft buys £1.6bn stake in London Stock Exchange owner. Read More...
FTSE 100 LONDON, UNITED KINGDOM - DECEMBER 11: A view of the snow covered mailbox during snowfall in London, United Kingdom on December 11, 2022. Officials announced that the most effective snowfall since 2013 is expected across the country. (Photo by Rasid Necati Aslim/Anadolu Agency via Getty Images)

The FTSE 100 opened lower amid data that shows the UK is still headed towards a recession. Photo: Rasid Necati Aslim/Anadolu Agency via Getty

The FTSE 100 and European stocks were off to a weak start on Monday ahead of a busy week of central bank announcements and economic data that has sparked recession fears once more.

The FTSE 100 (^FTSE) lost 0.26% to 7,454 at the open, while the CAC (^FCHI) in Paris retreated 0.48% to 6,645 points. In Germany, the DAX (^GDAXI) lost 0.51% to 14,296.

The UK’s economy rebounded in October after a contraction in September when output was impacted by the extra bank holiday for the Queen’s funeral, but but respite is set to be brief.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics said: “We think that GDP will fall by about 0.3% month-to-month in both November and December, leaving it down 0.2% on a quarter-on-quarter basis.”

Read more: UK economy returned to growth in October with 0.5% rise in GDP

“Activity indicators from S&P Global, Lloyds and the CBI, as well as the extremely low level of GfK’s consumer confidence index, all are consistent on past form with falling GDP.”

London Stock Exchange Group (LSEG.L) jumped 4.24% in early trading as Microsoft (MSFT) announced a 10-year partnership with the group and took a near 4% stake in the UK bourse operator. At Friday’s closing price, a 4% stake was valued at around £1.6bn ($1.96bn).

Meanwhile, Brent crude (BZ=F) was hovering around $76 per barrel, as a key pipeline supplying the United States remained shut while Russian president Vladimir Putin threatened to cut production in retaliation for a Western price cap on its exports.

S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the red as trade began in Europe.

In Asia, Tokyo’s Nikkei 225 (^N225) fell 0.21% to finish at 27,842 while the Hang Seng (^HSI) in Hong Kong plunged 2.29% to 19,444. The Shanghai Composite (000001.SS) lost 0.87% to 3,179 points.

Read more: Property: Average UK house price drops to £359,137

On Wall Street, markets finished lower on Friday as investors digested economic data and awaited a potential 50-basis point interest rate hike by the US Federal Reserve later this week.

The Dow Jones (^DJI) slipped 0.90% to 33,476. The S&P 500 (^GSPC) lost 0.73% to finish at 3,934 points and the tech-heavy Nasdaq (^IXIC) gained 0.70% to 11,004.

Watch: Stocks end lower as investors digest economic data

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