Europe close: Stocks retreat after weak German GDP print, Ukraine tensions
European shares finished lower on Friday following news that Germany's economy contracted by more than expected in the fourth quarter of 2021 and amid continued geopolitical tensions over Ukraine.
The pan-regional Stoxx 600 index was down 1.02% at 465.55 as investors digested US GDP data overnight and similar figures from Germany, France, Sweden and Spain.
The German economy contracted as renewed Covid-19 measures weighed on activity. GDP shrank 0.7% quarter-on-quarter. Europe’s largest economy grew 2.8% in 2021, Friday’s figures showed.
French data on the other hand showed that its economy expanded by 7% in 2021, the strongest rate in 52 years. Sweden beat expectations with growth of 6.4% as did Spanish GDP with 2% quarter-on-quarter growth, bringing annual growth to 5%.
"Looking ahead, we expect the eurozone economy to expand slightly in Q1 as the economic consequences of the current wave of cases should be far milder than those of previous waves," said Katharina Koenz at Oxford Economics.
"We expect a stronger pick-up in growth later this year as supply bottlenecks ease and consumer demand picks up but downside risks from high energy prices and lingering supply disruptions remain present."
In equity news, shares in Henkel & Co fell 9% as the company said it planned to merge its laundry-and-home-care and beauty-care divisions into one unit and announced a share-buyback program with a total value of up to €1bn.
IG Group slumped after shareholder TCMI sold 15.5m shares in the online trading platform.
Shares in Phoenix Group fell as Abrdn sold just under 40m shares in a placing to institutional investors, raising gross proceeds of around £264m.
Luxury goods maker LVMH gained after its fourth-quarter sales growth accelerated, while rivals Kering and Hermes were also higher on a readacross.
Sweden's H&M jumped more than 5% after the fashion retailer posted a bigger profit rise than expected for the September-November period.
Lighting maker Signify hit the top of the Stoxx with a 11% rise after reporting higher quarterly earnings.