On Monday, major European stock indices performed a downward reversal. Market participants are focused on the results of the French presidential elections. Apart from that, the UK weak economic reports, the upcoming ECB meeting, as well as the ongoing military conflict in eastern Europe are also in the spotlight.
By the time of writing this article, the STOXX Europe 600 index decreased by 0.5% to 458.5.
Finnish tire manufacturer Nokian Renkaat Oyj, included in the STOXX Europe 600 index, incurred the smallest losses on Monday. Its shares shed 11.7%. The company said that the EU sanctions on rubber supplies from Russia would adversely affect production.
The shares of Swedish mining company Boliden AB dropped by 6.7%), Just Eat Takeaway.com N.V. declined by -6.4%, and Italian outerwear brand Moncler S.p.A. sank by 4.8%.
The biggest gainers were the stocks of Bank of Ireland Group PLC (+4.3%), Rheinmetall AG (+4%), and Norwegian supplier of mineral fertilizers Yara International ASA (+3.4%).
Meanwhile, the FTSE 100 index lost 0.43%, dropping to 7632.7, the DAX index slid down by 0.81% to 14166.46, and the CAC 40 increased by 0.09% to 6555.34.
Societe Generale S.A. stock climbed by 6% as traders welcomed the bank's decision to quit Russia. It also agreed to sell its Rosbank PJSC unit to Russian investment group Interros. This transaction will end more than a 15-year investment in Rosbank.
The shares of French oil and gas company Total Energy SE (+2.4%), Bouygues S.A. (+1.6%), and Vivendi SE media conglomerate (+1.5%) also showed impressive growth.
The key stock index of France, the CAC 40, opened trading on Monday with an increase on the news that French President Emmanuel Macron would face Marine Le Pen in the second round of the country's presidential election. Macron topped the first round of ballots held on Sunday, leaving behind Marine Le Pen, the candidate from the far-right National Rally party.
The second round will take place in two weeks. If public opinion polls are to be believed, the struggle between the candidates will be very tough.
According to the Office for National Statistics, in February, UK industrial output fell by 0.6% in February compared to January. Economists had predicted an increase of 0.3%.
GDP data was also discouraging. In February, the indicator grew by 0.1% on a monthly basis, and by 9.5% on an annual basis versus the forecast readings of 0.3% and 9.5%.
Analysts are sure that the main reason for such a sharp drop in the UK economy is rising energy prices and a difficult geopolitical situation that has caused the energy crunch.
The pressure on EU stocks increased after Asia-Pacific stock markets closed with a drastic fall.
In recent weeks, Shanghai has been trying to contain the rapid spread of coronavirus despite the mass testing and lockdown at the end of March. On Sunday, the Shanghai authorities reported more than 26,000 new coronavirus cases.
In the fight against coronavirus, China stocks to a zero-tolerance COVID-19 policy. So, it is absolutely impossible to predict when the strict restrictions in the largest trading hub will be lifted.
The ECB monetary policy meeting will be held on Thursday. Stock market participants hope to get new hints about the ECB plans on monetary policy. In addition, inflation has already approached an all-time high of 7.5%
Importantly, EU states are reluctant to tighten monetary policy due to the negative impact of the Russia-Ukraine conflict on the eurozone economy. At the same time, some members of the ECB Governing Council speak in favor of a rate increase this year.
