European Shares Retreat Amid Fear Of Rate Hikes

European stocks fell in cautious trade on Friday, as the prospect of higher interest rates coupled with surging cases of the Omicron coronavirus variant added to uncertainty about the economic outlook.

The pan European Stoxx 600 dropped 0.8 percent to 472.98 after climbing 1.2 percent on Thursday.

The German DAX and France’s CAC 40 were also down around 0.8 percent each while the U.K.’s FTSE 100 was up 0.2 percent, a day after the Bank of England’s surprise rate hike.

Italian diagnostics firm DiaSorin plunged 13 percent after it forecast weaker 2022 sales and a near 60 percent plunge in Covid-19 revenue.

French pharmaceutical company Ipsen lost nearly 2 percent after it entered into an exclusive licensing agreement with GENFIT for Elafibranor.

Vinci SA gained half a percent. The concessions and construction company announced that the Western Strasbourg bypass, A355, in eastern France was commissioned.

Plane maker Airbus was modestly higher on the back of recent order wins.

HSBC Holdings dropped half a percent in London. The Financial Conduct Authority said it has fined the Asia-focused British lender about 63.95 million pounds for failings in its anti-money laundering processes.

Automakers BMW, Daimler, Volkswagen and Renault fell about 2 percent each after industry data showed EU new car sales dropped 20.5 percent year-on-year in November, following a 30.3 percent slump in October. New car registrations decreased for the fifth successive month.

Wind turbine manufacturer Nordex SE declined 2.7 percent despite a new order win.

Computer vision expert Basler gave up 2 percent after acquiring its two long-standing Korean trading partners DATVISION and IOVIS.

In economic releases, German business confidence weakened in December amid deteriorating pandemic situation, survey results from the ifo Institute showed.

The business climate index fell more-than-expected to 94.7 in December from 96.6 in the previous month. The expected reading was 95.3.

German producer prices rose at the fastest pace in seven decades in November, mainly driven by higher energy prices, preliminary data from Destatis revealed.

The producer price index rose 19.2 percent year-on-year after an 18.4 percent increase in October. The latest increase in producer prices was the biggest since November 1951, when they surged 20.6 percent.

Elsewhere, U.K. retail sales growth accelerated in November, data from the Office for National Statistics showed.

The retail sales volume grew 1.4 percent month-on-month in November, faster than the 1.1 percent increase seen in October and also economists’ forecast of +0.8 percent.

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